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Despite their lower guidance for their adjusted EBITDA during 2025 on the back of challenging market conditions, SunCoke Energy still forecasts strong free cash flow. This sees their shares trading with a very high forward free cash flow yield of circa 13% on current cost, as of the time of writing. It also provides ample scope for their dividend growth to continue into 2025, following the large increases during previous years.
SunCoke Energy is a major producer of coke, a coal derivative crucial to the steelmaking process. The company has stable margins, low debt, and a solid dividend, and is trading at a low valuation. Catalysts such as strong demand for steel, rising steel prices, and potential M&A activity could unlock more value for shareholders, in addition to the robust dividend.