Ternium Stock Soars 1.55% Amid Dividend Concerns

Ternium's stock price surged to its highest level since May 2025, with an intraday gain of 1.55%.

The strategy of buying TX shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years, with a 4.56% annualized return and a 21.64% total return as of the latest data point. However, the volatility is relatively high, with a maximum drawdown of 26.78% during the same period. This suggests that while there is potential for gains, the strategy is not without risk. Investors should consider their risk tolerance and investment horizon before adopting this approach.

Ternium's stock price has been under pressure due to concerns over its dividend policy. Analysts have expressed that the current dividend payouts are unsustainable given the company's low profit margins, which could potentially erode shareholder value rather than support growth or buybacks.

Financial performance in the first quarter of 2025 was disappointing, with earnings per share (EPS) dropping significantly to US$0.34 from US$1.84. This decline in EPS reflects weaker financial health and has contributed to the negative sentiment surrounding the stock.

Revenue for Ternium also saw a substantial decrease, down 17.7% year-over-year. This decline in revenue has led to negative net margins, further impacting the company's stock performance and investor confidence.

Despite these challenges, Ternium is actively involved in developing a new marine terminal at the Port of Brownsville. This project is expected to significantly boost the handling of steel and metal commodities, potentially influencing future growth and providing a positive outlook for the company's long-term prospects.