Critical Review: Gerdau (GGB) & Sutor Technology Group (TORZ)

Sutor Technology Group (OTCMKTS:TORZ) and Gerdau (NYSE:GGB) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, risk, institutional ownership, valuation, dividends and earnings.

Volatility & Risk

Sutor Technology Group has a beta of 4.32, suggesting that its stock price is 332% more volatile than the S&P 500. Comparatively, Gerdau has a beta of 2.19, suggesting that its stock price is 119% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Sutor Technology Group and Gerdau, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sutor Technology Group 0 0 0 0 N/A
Gerdau 0 0 4 0 3.00

Gerdau has a consensus price target of $4.00, indicating a potential downside of 7.83%. Given Gerdau’s higher probable upside, analysts plainly believe Gerdau is more favorable than Sutor Technology Group.

Profitability

This table compares Sutor Technology Group and Gerdau’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sutor Technology Group N/A N/A N/A
Gerdau -0.43% 6.25% 2.96%

Dividends

Gerdau pays an annual dividend of $0.03 per share and has a dividend yield of 0.7%. Sutor Technology Group does not pay a dividend. Gerdau pays out 33.3% of its earnings in the form of a dividend.

Insider & Institutional Ownership

4.7% of Gerdau shares are owned by institutional investors. 72.8% of Sutor Technology Group shares are owned by insiders. Comparatively, 0.0% of Gerdau shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Sutor Technology Group 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
Sutor Technology Group N/A N/A N/A N/A N/A
Gerdau $11.57 billion 0.65 -$112.55 million $0.09 48.22

Sutor Technology Group has higher earnings, but lower revenue than Gerdau.

Summary

Gerdau beats Sutor Technology Group on 7 of the 11 factors compared between the two stocks.

Sutor Technology Group Company Profile

Sutor Technology Group Limited, through its subsidiaries, develops, manufactures, and sells finished steel products in the People's Republic of China. The company offers longitudinal double submerged–arc welded steel pipes, large and small diameter and spiral seamed heavy steel pipes, hot-dip galvanized and pre-painted galvanized steel sheets, acid pickled steel products, cold-rolled steel products, and galvolume/galfan products. It also provides high precision steel shearing and distribution services. In addition, the company offers processing, distribution, and logistic solutions. Its products are used in various industries, such as solar energy, household appliances, medical instruments, IT, building and construction, and automobiles. Sutor Technology Group Limited is headquartered in Changshu, the People's Republic of China.

Gerdau Company Profile

Gerdau S.A. provides steel-related products and services worldwide. It operates through four segments: Brazil Operations, North America Operations, South America Operations, and Special Steel Operations. The company offers semi-finished products, including billets, blooms, and slabs; common long rolled products, such as rebars, wire rods, merchant bars, light shapes, and profiles, which are used primarily in the construction and manufacturing industries; and drawn products comprising barbed and barbless fence wires, galvanized wires, fences, concrete reinforcing wire meshes, nails, and clamps, as well as mines and produces iron ore. It also produces special steel products for use in auto parts, light and heavy vehicles, and agricultural machinery, as well as the oil and gas, wind energy, machinery and equipment, mining and rail, and others markets. In addition, the company offers flat products comprising hot rolled coils and heavy plates; and resells flat steel products. It sells its products through independent distributors, direct sales from the mills, and its retail network. The company was founded in 1901 and is based in Sao Paulo, Brazil. Gerdau S.A. is a subsidiary of Metalurgica Gerdau S.A.

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