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

Profitability

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

Net Margins Return on Equity Return on Assets
National Steel N/A N/A N/A
Gerdau -5.73% 3.47% 1.61%

Institutional & Insider Ownership

3.2% of National Steel shares are held by institutional investors. Comparatively, 5.3% 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, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

National Steel has a beta of 2.22, meaning that its share price is 122% more volatile than the S&P 500. Comparatively, Gerdau has a beta of 2.29, meaning that its share price is 129% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for National Steel and Gerdau, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Steel 0 1 0 0 2.00
Gerdau 0 2 4 0 2.67

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
National Steel $5.14 billion 0.67 $919.47 million $0.25 10.12
Gerdau $10.62 billion 0.53 $1.09 billion ($0.31) -10.68

Gerdau has higher revenue and earnings than National Steel. Gerdau is trading at a lower price-to-earnings ratio than National Steel, indicating that it is currently the more affordable of the two stocks.

Dividends

Gerdau pays an annual dividend of $0.01 per share and has a dividend yield of 0.3%. National Steel does not pay a dividend. Gerdau pays out -3.2% of its earnings in the form of a dividend. Gerdau has increased its dividend for 2 consecutive years.

Summary

Gerdau beats National Steel on 13 of the 16 factors compared between the two stocks.

National Steel Company Profile

Companhia Siderurgica Nacional is a Brazil-based company engaged in the steel industry. The Company operates throughout the entire steel production chain, from the mining of iron ore to the production and sale of a range of steel products, including coated galvanized flat steel and tinplate. The Company operates in five segments: Steel, Mining, Cement, Logistics and Energy. The Steel segment focuses on the production, distribution and sale of flat steel, long steel, metallic containers and galvanized steel, with operations in Brazil, the United States, Portugal and Germany. The Mining segment encompasses the activities of iron ore and tin mining. The Cement segment is responsible for the cement production, distribution and sale operations. The Logistics segment manages port terminal for containers, as well as railway networks. The Energy segment includes generation of electric power. The Company is controlled by Vicunha Acos SA.

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.

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