3 Top-Rated Steel Producer Stocks to Buy Now

Steel stocks have staged a strong comeback as governments continue investing in infrastructure, manufacturers expand production, and supply chains normalize.

While steel production remains a cyclical industry, companies with efficient operations, healthy balance sheets, and exposure to high-value end markets can outperform across market cycles.

For investors looking for opportunities in the basic materials sector, these three steel producers stand out for their competitive advantages and long-term growth potential.

Ternium – TX

Zacks Rank #1 (Strong Buy)

Ternium TX) has established itself as one of the leading steel producers in the Americas, with operations spanning Mexico, Brazil, Argentina, Colombia, Venezuela, and the southern United States. The company produces flat and long steel products used across the automotive, construction, energy, and manufacturing industries.

One of Ternium's biggest strengths is its vertically integrated business model. In addition to producing finished steel products, Ternium owns mining assets that supply iron ore, helping control input costs and improve margins during periods of commodity price volatility. The company's extensive manufacturing footprint also positions it to benefit from nearshoring trends as more manufacturers expand production throughout North America.

Financially, Ternium maintains a conservative balance sheet and has historically generated strong cash flow, allowing it to invest in capacity expansion while returning capital to shareholders through dividends. Analysts continue to view the stock favorably, citing its attractive valuation and exposure to industrial growth across the Americas.

Trading at just 8X forward earnings with a nearly 6% annual dividend yield, Ternium’s EPS is expected to soar 138% in its current fiscal 2027 to $5.16 from $2.17 per share in FY26. Plus, FY28 EPS is projected to spike another 19% to $6.13.  

For investors seeking a combination of value, dividend income, and long-term growth potential, Ternium remains an appealing choice.

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L.B. Foster – FSTR

Zacks Rank #1 (Strong Buy)

While smaller than many global steel producers, L.B. Foster FSTR) occupies an attractive niche by manufacturing and supplying engineered steel products and infrastructure solutions.

L.B. Foster serves railroad operators, construction firms, utility providers, and industrial customers throughout North America.

Rather than relying solely on commodity steel pricing, L.B. Foster benefits from value-added engineered products that typically carry higher margins and generate recurring demand through infrastructure maintenance and replacement projects.

The company has also focused on improving operational efficiency, reducing costs, and strengthening profitability in recent years. As federal and state infrastructure spending continues to support rail and transportation projects, L.B. Foster appears well-positioned to benefit from increased demand for its specialized products.

Because of its smaller market capitalization, FSTR may experience greater volatility than larger steel companies, but that also creates the potential for outsized returns if execution continues to improve. Keeping that in mind, L.B. Foster’s EPS is expected to rebound 152% this year to $1.74, and another 14% spike is projected in FY27.

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Aperam – APEMY

Zacks Rank #2 (Buy)

Aperam APEMY) specializes in stainless steel, electrical steel, and specialty alloys, giving it exposure to markets that generally offer higher margins than traditional carbon steel production. Furthermore, Aperam serves customers across automotive, aerospace, industrial equipment, consumer goods, and renewable energy sectors.

A key differentiator for Aperam is its emphasis on sustainability. The company has invested heavily in recycling operations and low-carbon steel production, positioning itself to benefit as customers increasingly prioritize environmentally responsible sourcing.

Aperam also maintains a disciplined capital allocation strategy, balancing growth investments with consistent shareholder returns through dividends and share repurchases. This combination of operational discipline and exposure to premium steel products makes Aperam an attractive option for long-term investors.

As industries shift toward electrification, renewable energy, and advanced manufacturing, demand for specialty steel products could provide additional growth opportunities for Aperam. With high double-digit EPS growth expected in FY26 and FY27, APEMY offers a 4.19% annual dividend yield.

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Summary & Final Thoughts

Steel production remains a cyclical industry, but investors who focus on financially sound producers with competitive advantages can still uncover compelling long-term opportunities.

• Ternium (TX) offers diversified operations, vertical integration, and significant exposure to North American manufacturing growth.

• L.B. Foster (FSTR) provides a differentiated infrastructure-focused business model with potential upside from transportation and rail investment.

• Aperam (APEMY) combines specialty steel production, sustainability leadership, and shareholder-friendly capital allocation.

While short-term steel prices can fluctuate, these three companies possess characteristics that could help them outperform over the long run, making them worthy of consideration for investors seeking exposure to the basic materials sector.

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This article originally published on Zacks Investment Research (zacks.com).

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