Here’s Why Keeping Reliance Shares in Your Investment Portfolio Makes Sense

Reliance, Inc.: Growth Driven by Acquisitions and Financial Strength

Reliance, Inc. (RS) has demonstrated resilience by expanding through targeted acquisitions, maintaining a diverse portfolio, and upholding strong liquidity, even as it faces challenges from certain market slowdowns and tariff-related cost increases.

Over the past year, RS shares have climbed 10.8%, while the broader Mining – Miscellaneous sector surged by 63.2%.

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Why Consider Keeping RS in Your Portfolio?

Let’s explore the factors that make RS a compelling holding right now.

How Acquisitions and Liquidity Support RS

Reliance’s robust business model, which serves a wide range of industries, is further strengthened by its strategic acquisition approach. Since its IPO in 1994, the company has completed 76 acquisitions, broadening its product offerings and enhancing its value-added processing capabilities.

• Recent purchases such as Rotax Metals, Admiral Metals, and Nu-Tech Precision Metals align with Reliance’s focus on acquiring high-quality businesses.
• The acquisition of Southern Steel Supply expanded the company’s footprint in the Southern U.S. and increased its processing services.
• By acquiring Cooksey Iron & Metal Co, Reliance has grown its presence in the rapidly developing Southeastern region.
• The addition of American Alloy introduced specialty carbon steel plates and new production capabilities to Reliance’s portfolio.
• In August 2024, Reliance acquired FerrouSouth’s toll processing assets, boosting its tolling operations and expanding Feralloy’s capacity in the Southeast.

Demand for non-residential construction, Reliance’s largest market by volume, improved in the fourth quarter of 2025 compared to the previous year. The company anticipates continued strength in this sector into the first quarter of 2026, fueled by investments in data centers, manufacturing, and public infrastructure.

Reliance’s solid liquidity position enables it to create value for shareholders. In the fourth quarter, the company repurchased about 716,000 shares for $200.1 million, and total buybacks in 2025 reached $594.1 million. The board also increased the quarterly dividend by 4.2% to $1.25 per share. At the end of 2025, Reliance held $216.6 million in cash and equivalents and generated $831.4 million in operating cash flow, thanks to effective capital management and profitability. In total, $1.18 billion was allocated to shareholder returns and organic growth last year.

Challenges: Market Demand and Cost Pressures

Despite growth in several key markets, Reliance faces ongoing weakness in the semiconductor sector, where demand remained subdued in the fourth quarter due to high inventory levels across the supply chain. This softness is expected to persist into early 2026.

The commercial aerospace market is also sluggish, with elevated inventories dampening demand. While a gradual recovery is anticipated in 2026 as production rates increase, the near-term outlook remains cautious.

Additionally, Reliance is contending with higher aluminum costs driven by tariffs, in an environment of abundant supply and muted demand. In 2025, these increased costs resulted in a last-in, first-out (LIFO) expense of $114 million—above the company’s $100 million estimate—putting pressure on margins. For 2026, LIFO expenses are projected at $100 million, mainly due to rising costs for carbon and aluminum products.

RS Stock Rating and Noteworthy Alternatives

Currently, RS holds a Zacks Rank #3 (Hold).

Other notable stocks in the Basic Materials sector include:

• Albemarle Corporation (ALB) – Zacks Rank #1 (Strong Buy)
• Compania de Minas Buenaventura S.A.A. (BVN) – Zacks Rank #1 (Strong Buy)
• Balchem Corporation (BCPC) – Zacks Rank #2 (Buy)

For a full list of Zacks #1 Rank stocks, click here.

• Albemarle’s 2026 earnings are projected at $7.87 per share, reflecting a 1,096.2% year-over-year increase. The company has surpassed earnings estimates in three of the last four quarters, with an average surprise of 57.8%.
• Buenaventura’s 2026 earnings are estimated at $3.45 per share, up 4.6% from the previous year. BVN has exceeded expectations in each of the past four quarters, averaging an 80.4% surprise.
• Balchem’s 2026 earnings are forecasted at $5.47 per share, a 6.2% year-over-year rise. The consensus estimate for BCPC has been revised upward by 1.1% in the past two months.

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Related Free Stock Analysis Reports

• Reliance, Inc. (RS): Free Stock Analysis Report
• Albemarle Corporation (ALB): Free Stock Analysis Report
• Buenaventura Mining Company Inc. (BVN): Free Stock Analysis Report
• Balchem Corporation (BCPC): Free Stock Analysis Report

Originally published by Zacks Investment Research

Zacks Investment Research