Nucor (NYSE:NUE) & Gerdau (GGB) Head-To-Head Analysis

Gerdau (NYSE: GGB) and Nucor (NYSE:NUE) are both mid-cap basic materials companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, earnings, risk, dividends, institutional ownership, analyst recommendations and profitability.

Profitability

This table compares Gerdau and Nucor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gerdau -5.26% -7.29% -3.38%
Nucor 6.60% 15.64% 8.57%

Dividends

Gerdau pays an annual dividend of $0.01 per share and has a dividend yield of 0.3%. Nucor pays an annual dividend of $1.51 per share and has a dividend yield of 2.7%. Nucor pays out 43.8% of its earnings in the form of a dividend. Gerdau has raised its dividend for 43 consecutive years.

Institutional & Insider Ownership

5.0% of Gerdau shares are held by institutional investors. Comparatively, 76.6% of Nucor shares are held by institutional investors. 0.0% of Gerdau shares are held by company insiders. Comparatively, 0.7% of Nucor shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Gerdau has a beta of 2.35, meaning that its stock price is 135% more volatile than the S&P 500. Comparatively, Nucor has a beta of 1.51, meaning that its stock price is 51% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Gerdau and Nucor, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gerdau 0 2 1 0 2.33
Nucor 0 4 11 0 2.73

Nucor has a consensus target price of $69.10, indicating a potential upside of 24.80%. Given Nucor’s stronger consensus rating and higher probable upside, analysts clearly believe Nucor is more favorable than Gerdau.

Valuation & Earnings

This table compares Gerdau and Nucor’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gerdau $11.17 billion 0.36 $1.15 billion N/A N/A
Nucor $18.24 billion 0.97 $2.67 billion $3.45 16.05

Nucor has higher revenue and earnings than Gerdau.

Summary

Nucor beats Gerdau on 12 of the 16 factors compared between the two stocks.

Gerdau Company Profile

Gerdau S.A. (Gerdau) is a manufacturer of long steel in the North and South America. The Company is engaged in the production and commercialization of steel products in general, through its mills located in Argentina, Brazil, Canada, Chile, Colombia, Spain, the United States, Guatemala, India, Mexico, Peru, the Dominican Republic, Uruguay and Venezuela. Its segments are Brazil Operations, which includes operations of steel and iron ore in Brazil, except Special Steels, and the operation of metallurgical coal and coke in Colombia; North America Operations, which includes all operations in North America, except those of Mexico and Special Steels; South America Operations, which includes operations in South America, except Brazil and the operation of metallurgical coal and coke in Colombia, and Special Steel Operations, including special steel operations in Brazil, Spain, the United States and India. It supplies its customers a range of products, including iron ore semi-finished products.

Nucor Company Profile

Nucor Corporation (Nucor) manufactures steel and steel products. The Company produces direct reduced iron (DRI) for use in its steel mills. It operates in three segments: steel mills, steel products and raw materials. The steel mills segment produces and distributes sheet steel (hot-rolled, cold-rolled and galvanized), plate steel, structural steel (wide-flange beams, beam blanks, H-piling and sheet piling) and bar steel (blooms, billets, concrete reinforcing bar, merchant bar, wire rod and special bar quality). The steel products segment produces steel joists and joist girders, steel deck, fabricated concrete reinforcing steel and cold finished steel. The raw materials produces DRI; brokers ferrous and nonferrous metals, pig iron, HBI and DRI; supplies ferro-alloys, and processes ferrous and nonferrous scrap metal. It also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron (HBI) and DRI.

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