Gerdau (NYSE: GGB) and Mechel PAO (NYSE:MTL) are both basic materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current recommendations for Gerdau and Mechel PAO, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gerdau 0 2 1 0 2.33
Mechel PAO 1 0 0 0 1.00

Dividends

Gerdau pays an annual dividend of $0.01 per share and has a dividend yield of 0.3%. Mechel PAO does not pay a dividend. Gerdau pays out -3.2% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Gerdau -5.73% 3.47% 1.61%
Mechel PAO N/A N/A N/A

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gerdau $11.00 billion 0.61 $1.13 billion ($0.31) -12.58
Mechel PAO $9.52 billion 0.12 $2.49 billion N/A N/A

Mechel PAO has higher revenue, but lower earnings than Gerdau.

Institutional & Insider Ownership

5.3% of Gerdau shares are owned by institutional investors. Comparatively, 8.3% of Mechel PAO shares are owned by institutional investors. 0.0% of Gerdau shares are owned by insiders. Comparatively, 36.3% of Mechel PAO shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Gerdau has a beta of 2.33, indicating that its share price is 133% more volatile than the S&P 500. Comparatively, Mechel PAO has a beta of -1.09, indicating that its share price is 209% less volatile than the S&P 500.

Summary

Gerdau beats Mechel PAO on 9 of the 13 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.

Mechel PAO Company Profile

Mechel PAO, formerly Mechel OAO, is a holding company. The Company operates in the mining, steel and power industry segments. Its segments include Steel segment, comprising production and sales of semi-finished steel products, carbon and specialty long products, carbon and stainless flat products, and value-added downstream metal products, including forgings, stampings, and hardware, and ferrosilicon; Mining segment, comprising production and sales of coal (coking and steam), and middlings, coke and chemical products, and iron ore, which supplies raw materials to the Steel and Power segments, and also sells raw materials to third parties, and Power segment, comprising generation and sales of electricity and heat power, which supplies electricity and heat power to the Steel and Mining segments, and also sells a portion of electricity and heat power to third parties. It has freight seaports in Russia on the Sea of Japan and on the Sea of Azov, and a freight river port on the Kama River.

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