Alpha Metallurgical Resources (NYSE:AMR – Get Free Report) and Gerdau (NYSE:GGB – Get Free Report) are both mid-cap materials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.
Earnings and Valuation
This table compares Alpha Metallurgical Resources and Gerdau”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Alpha Metallurgical Resources | $2.07 billion | 1.02 | -$61.69 million | ($3.58) | -46.46 |
| Gerdau | $12.51 billion | 0.79 | $248.41 million | $0.23 | 21.85 |
Gerdau has higher revenue and earnings than Alpha Metallurgical Resources. Alpha Metallurgical Resources is trading at a lower price-to-earnings ratio than Gerdau, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Alpha Metallurgical Resources has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Gerdau has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500.
Dividends
Alpha Metallurgical Resources pays an annual dividend of $2.00 per share and has a dividend yield of 1.2%. Gerdau pays an annual dividend of $0.15 per share and has a dividend yield of 3.0%. Alpha Metallurgical Resources pays out -55.9% of its earnings in the form of a dividend. Gerdau pays out 65.2% 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.
Analyst Recommendations
This is a summary of current recommendations and price targets for Alpha Metallurgical Resources and Gerdau, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Alpha Metallurgical Resources | 2 | 5 | 0 | 0 | 1.71 |
| Gerdau | 0 | 5 | 3 | 1 | 2.56 |
Alpha Metallurgical Resources currently has a consensus price target of $179.75, indicating a potential upside of 8.07%. Gerdau has a consensus price target of $5.57, indicating a potential upside of 10.95%. Given Gerdau’s stronger consensus rating and higher probable upside, analysts plainly believe Gerdau is more favorable than Alpha Metallurgical Resources.
Insider & Institutional Ownership
84.3% of Alpha Metallurgical Resources shares are held by institutional investors. Comparatively, 1.5% of Gerdau shares are held by institutional investors. 18.2% of Alpha Metallurgical Resources shares are held by company insiders. Comparatively, 0.0% of Gerdau shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Profitability
This table compares Alpha Metallurgical Resources and Gerdau’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Alpha Metallurgical Resources | -2.23% | -2.99% | -2.01% |
| Gerdau | 3.37% | 7.97% | 5.18% |
Summary
Gerdau beats Alpha Metallurgical Resources on 13 of the 17 factors compared between the two stocks.
About Alpha Metallurgical Resources
Alpha Metallurgical Resources, Inc., a mining company, produces, processes, and sells met and thermal coal in Virginia and West Virginia. The company offers metallurgical coal products. It operates twenty-two active mines and nine coal preparation and load-out facilities. The company was formerly known as Contura Energy, Inc. and changed its name to Alpha Metallurgical Resources, Inc. in February 2021. Alpha Metallurgical Resources, Inc. was incorporated in 2016 and is headquartered in Bristol, Tennessee.
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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