Major Drilling Group International (OTCMKTS:MJDLF – Get Free Report) and Gerdau (NYSE:GGB – Get Free Report) are both materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, institutional ownership, analyst recommendations, risk, valuation and profitability.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Major Drilling Group International and Gerdau, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Major Drilling Group International | 0 | 0 | 2 | 0 | 3.00 |
| Gerdau | 0 | 2 | 3 | 1 | 2.83 |
Gerdau has a consensus price target of $5.28, indicating a potential upside of 6.84%. Given Gerdau’s higher possible upside, analysts clearly believe Gerdau is more favorable than Major Drilling Group International.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Major Drilling Group International | N/A | N/A | N/A | ($0.70) | -16.03 |
| Gerdau | $12.51 billion | 0.79 | $248.41 million | $0.23 | 21.50 |
Gerdau has higher revenue and earnings than Major Drilling Group International. Major Drilling Group International is trading at a lower price-to-earnings ratio than Gerdau, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Major Drilling Group International and Gerdau’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Major Drilling Group International | N/A | N/A | N/A |
| Gerdau | 3.37% | 7.97% | 5.18% |
Dividends
Major Drilling Group International pays an annual dividend of $0.20 per share and has a dividend yield of 1.8%. Gerdau pays an annual dividend of $0.12 per share and has a dividend yield of 2.4%. Major Drilling Group International pays out -28.8% of its earnings in the form of a dividend. Gerdau pays out 52.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Institutional and Insider Ownership
61.9% of Major Drilling Group International shares are held by institutional investors. Comparatively, 1.5% of Gerdau shares are held by institutional investors. 0.0% of Gerdau 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.
Summary
Gerdau beats Major Drilling Group International on 11 of the 14 factors compared between the two stocks.
About Major Drilling Group International
Major Drilling Group International Inc. provides contract drilling services for mining and mineral exploration companies. The company offers a suite of drilling services, including surface and underground coring, directional, reverse circulation, sonic, geotechnical, environmental, water-well, coal-bed methane, shallow gas, underground percussive, longhole drilling, surface drill and blast, and related mining services. The company was founded in 1980 and is headquartered in Moncton, Canada with additional offices in the United States, Mexico, South America, Asia, Africa, and Australia.
About Gerdau
Gerdau S.A., together with its subsidiaries, operates as a steel producer company. The company operates through Brazil Business, North America Business, South America Business, and Special Steel Business segments. It also provides semi-finished products, including billets, blooms, and slabs; common long rolled products, such as rebars, wire rods, merchant bars, light shapes, and profiles to the construction and manufacturing industries; drawn products comprising barbed and barbless fence wires, galvanized wires, fences, concrete reinforcing wire mesh, nails, and clamps for manufacturing, construction, and agricultural industries; and special steel products used in auto parts, light and heavy vehicles, and agricultural machinery, as well as in the oil and gas, wind energy, machinery and equipment, mining and rail, and other markets. In addition, the company offers flat products, such as hot-rolled steel coils and heavy plates; and resells flat steel products. Further, it operates mines that produce iron ore located in the Brazilian state of Minas Gerais. The company sells its products through independent distributors, direct sales from the mills, and its retail network. Gerdau S.A. was founded in 1901 and is based in São Paulo, Brazil.
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