GERDAU SA -SPON ADR (GGB) Stock Fundamental Analysis
NYSE:GGB - US3737371050 - ADR
3.08 USD
+0.01 (+0.33%)
3.02 USD
-0.06 (-1.95%)
GGB gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 155 industry peers in the Metals & Mining industry. While GGB belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. GGB may be a bit undervalued, certainly considering the very reasonable score on growth This makes GGB very considerable for value investing!
1. Profitability
1.1 Basic Checks
In the past year GGB was profitable.
GGB had a positive operating cash flow in the past year.
In the past 5 years GGB has always been profitable.
GGB had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
GGB has a better Return On Assets (3.82%) than 71.61% of its industry peers.
The Return On Equity of GGB (5.84%) is better than 69.68% of its industry peers.
Looking at the Return On Invested Capital, with a value of 6.56%, GGB is in the better half of the industry, outperforming 68.39% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for GGB is in line with the industry average of 12.86%.
The 3 year average ROIC (14.04%) for GGB is well above the current ROIC(6.56%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.82% | ||
| ROE | 5.84% | ||
| ROIC | 6.56% |
ROA(3y)10.31%
ROA(5y)11.13%
ROE(3y)16.07%
ROE(5y)18.44%
ROIC(3y)14.04%
ROIC(5y)15.33%
1.3 Margins
With a decent Profit Margin value of 4.80%, GGB is doing good in the industry, outperforming 70.97% of the companies in the same industry.
GGB's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 8.54%, GGB is doing good in the industry, outperforming 64.52% of the companies in the same industry.
GGB's Operating Margin has improved in the last couple of years.
The Gross Margin of GGB (12.80%) is comparable to the rest of the industry.
GGB's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.54% | ||
| PM (TTM) | 4.8% | ||
| GM | 12.8% |
OM growth 3Y-27.13%
OM growth 5Y2.99%
PM growth 3Y-28.98%
PM growth 5Y18.44%
GM growth 3Y-19.75%
GM growth 5Y5.31%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), GGB is creating some value.
The number of shares outstanding for GGB has been reduced compared to 1 year ago.
The number of shares outstanding for GGB has been reduced compared to 5 years ago.
Compared to 1 year ago, GGB has a worse debt to assets ratio.
2.2 Solvency
GGB has an Altman-Z score of 2.37. This is not the best score and indicates that GGB is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.37, GGB is in line with its industry, outperforming 47.74% of the companies in the same industry.
GGB has a debt to FCF ratio of 3.25. This is a good value and a sign of high solvency as GGB would need 3.25 years to pay back of all of its debts.
GGB's Debt to FCF ratio of 3.25 is fine compared to the rest of the industry. GGB outperforms 74.19% of its industry peers.
GGB has a Debt/Equity ratio of 0.24. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of GGB (0.24) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 3.25 | ||
| Altman-Z | 2.37 |
ROIC/WACC0.51
WACC12.75%
2.3 Liquidity
GGB has a Current Ratio of 2.64. This indicates that GGB is financially healthy and has no problem in meeting its short term obligations.
With a Current ratio value of 2.64, GGB perfoms like the industry average, outperforming 56.13% of the companies in the same industry.
A Quick Ratio of 1.28 indicates that GGB should not have too much problems paying its short term obligations.
GGB's Quick ratio of 1.28 is in line compared to the rest of the industry. GGB outperforms 45.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.64 | ||
| Quick Ratio | 1.28 |
3. Growth
3.1 Past
The earnings per share for GGB have decreased strongly by -14.69% in the last year.
The Earnings Per Share has been growing by 23.61% on average over the past years. This is a very strong growth
GGB shows a decrease in Revenue. In the last year, the revenue decreased by -2.74%.
The Revenue has been growing by 11.07% on average over the past years. This is quite good.
EPS 1Y (TTM)-14.69%
EPS 3Y-36.8%
EPS 5Y23.61%
EPS Q2Q%0%
Revenue 1Y (TTM)-2.74%
Revenue growth 3Y-5.07%
Revenue growth 5Y11.07%
Sales Q2Q%5.48%
3.2 Future
The Earnings Per Share is expected to grow by 11.08% on average over the next years. This is quite good.
Based on estimates for the next years, GGB will show a small growth in Revenue. The Revenue will grow by 6.73% on average per year.
EPS Next Y5.84%
EPS Next 2Y15.27%
EPS Next 3Y11.08%
EPS Next 5YN/A
Revenue Next Year4.16%
Revenue Next 2Y4.76%
Revenue Next 3Y4.64%
Revenue Next 5Y6.73%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
GGB is valuated reasonably with a Price/Earnings ratio of 9.06.
Based on the Price/Earnings ratio, GGB is valued cheaply inside the industry as 96.77% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of GGB to the average of the S&P500 Index (27.08), we can say GGB is valued rather cheaply.
GGB is valuated cheaply with a Price/Forward Earnings ratio of 6.06.
Based on the Price/Forward Earnings ratio, GGB is valued cheaper than 95.48% of the companies in the same industry.
GGB is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.72, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.06 | ||
| Fwd PE | 6.06 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GGB is valued cheaply inside the industry as 94.19% of the companies are valued more expensively.
94.84% of the companies in the same industry are more expensive than GGB, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.76 | ||
| EV/EBITDA | 4.6 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of GGB may justify a higher PE ratio.
PEG (NY)1.55
PEG (5Y)0.38
EPS Next 2Y15.27%
EPS Next 3Y11.08%
5. Dividend
5.1 Amount
GGB has a Yearly Dividend Yield of 2.03%. Purely for dividend investing, there may be better candidates out there.
GGB's Dividend Yield is rather good when compared to the industry average which is at 2.59. GGB pays more dividend than 83.23% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, GGB has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.03% |
5.2 History
On average, the dividend of GGB grows each year by 28.72%, which is quite nice.
GGB has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)28.72%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
GGB pays out 51.48% of its income as dividend. This is a bit on the high side, but may be sustainable.
GGB's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP51.48%
EPS Next 2Y15.27%
EPS Next 3Y11.08%
3.08
+0.01 (+0.33%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners28.16%
Inst Owner Change-2.85%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap6.15B
Analysts82.86
Price Target4.03 (30.84%)
Short Float %1.47%
Short Ratio1.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.03% |
Yearly Dividend0.15
Dividend Growth(5Y)28.72%
DP51.48%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-27.23%
Min EPS beat(2)-32.81%
Max EPS beat(2)-21.66%
EPS beat(4)0
Avg EPS beat(4)-17.98%
Min EPS beat(4)-32.81%
Max EPS beat(4)-4.32%
EPS beat(8)1
Avg EPS beat(8)-17.07%
EPS beat(12)4
Avg EPS beat(12)-11.8%
EPS beat(16)6
Avg EPS beat(16)-8.15%
Revenue beat(2)0
Avg Revenue beat(2)-1.32%
Min Revenue beat(2)-1.5%
Max Revenue beat(2)-1.14%
Revenue beat(4)0
Avg Revenue beat(4)-2.48%
Min Revenue beat(4)-3.75%
Max Revenue beat(4)-1.14%
Revenue beat(8)1
Avg Revenue beat(8)-3.34%
Revenue beat(12)1
Avg Revenue beat(12)-3.64%
Revenue beat(16)4
Avg Revenue beat(16)-2.73%
PT rev (1m)-4.54%
PT rev (3m)-1.13%
EPS NQ rev (1m)0.32%
EPS NQ rev (3m)-8.97%
EPS NY rev (1m)-10.42%
EPS NY rev (3m)-10.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.47%
Revenue NY rev (1m)-0.61%
Revenue NY rev (3m)-0.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.06 | ||
| Fwd PE | 6.06 | ||
| P/S | 0.49 | ||
| P/FCF | 6.76 | ||
| P/OCF | 2.9 | ||
| P/B | 0.59 | ||
| P/tB | 0.78 | ||
| EV/EBITDA | 4.6 |
EPS(TTM)0.34
EY11.04%
EPS(NY)0.51
Fwd EY16.51%
FCF(TTM)0.46
FCFY14.79%
OCF(TTM)1.06
OCFY34.45%
SpS6.32
BVpS5.19
TBVpS3.96
PEG (NY)1.55
PEG (5Y)0.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.82% | ||
| ROE | 5.84% | ||
| ROCE | 7.94% | ||
| ROIC | 6.56% | ||
| ROICexc | 7.24% | ||
| ROICexgc | 9.04% | ||
| OM | 8.54% | ||
| PM (TTM) | 4.8% | ||
| GM | 12.8% | ||
| FCFM | 7.21% |
ROA(3y)10.31%
ROA(5y)11.13%
ROE(3y)16.07%
ROE(5y)18.44%
ROIC(3y)14.04%
ROIC(5y)15.33%
ROICexc(3y)15.46%
ROICexc(5y)17.65%
ROICexgc(3y)19.57%
ROICexgc(5y)23.23%
ROCE(3y)16.99%
ROCE(5y)18.55%
ROICexcg growth 3Y-39.41%
ROICexcg growth 5Y0.17%
ROICexc growth 3Y-37.95%
ROICexc growth 5Y1.73%
OM growth 3Y-27.13%
OM growth 5Y2.99%
PM growth 3Y-28.98%
PM growth 5Y18.44%
GM growth 3Y-19.75%
GM growth 5Y5.31%
F-Score3
Asset Turnover0.8
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 3.25 | ||
| Debt/EBITDA | 1.46 | ||
| Cap/Depr | 199.56% | ||
| Cap/Sales | 9.58% | ||
| Interest Coverage | 5.45 | ||
| Cash Conversion | 125.84% | ||
| Profit Quality | 150.27% | ||
| Current Ratio | 2.64 | ||
| Quick Ratio | 1.28 | ||
| Altman-Z | 2.37 |
F-Score3
WACC12.75%
ROIC/WACC0.51
Cap/Depr(3y)168.5%
Cap/Depr(5y)137.07%
Cap/Sales(3y)7.13%
Cap/Sales(5y)5.8%
Profit Quality(3y)85.75%
Profit Quality(5y)103.93%
High Growth Momentum
Growth
EPS 1Y (TTM)-14.69%
EPS 3Y-36.8%
EPS 5Y23.61%
EPS Q2Q%0%
EPS Next Y5.84%
EPS Next 2Y15.27%
EPS Next 3Y11.08%
EPS Next 5YN/A
Revenue 1Y (TTM)-2.74%
Revenue growth 3Y-5.07%
Revenue growth 5Y11.07%
Sales Q2Q%5.48%
Revenue Next Year4.16%
Revenue Next 2Y4.76%
Revenue Next 3Y4.64%
Revenue Next 5Y6.73%
EBIT growth 1Y-22.86%
EBIT growth 3Y-30.82%
EBIT growth 5Y14.4%
EBIT Next Year34.22%
EBIT Next 3Y17.15%
EBIT Next 5Y12.24%
FCF growth 1Y-19.93%
FCF growth 3Y-16.11%
FCF growth 5YN/A
OCF growth 1Y6.09%
OCF growth 3Y-3.12%
OCF growth 5Y47.27%