GERDAU SA -SPON ADR (GGB)

US3737371050 - ADR

4.28  -0.05 (-1.15%)

After market: 4.19 -0.09 (-2.1%)

Fundamental Rating

7

Taking everything into account, GGB scores 7 out of 10 in our fundamental rating. GGB was compared to 156 industry peers in the Metals & Mining industry. GGB scores excellent points on both the profitability and health parts. This is a solid base for a good stock. GGB has a bad growth rate and is valued cheaply. Finally GGB also has an excellent dividend rating. With these ratings, GGB could be worth investigating further for value and dividend investing!.



9

1. Profitability

1.1 Basic Checks

GGB had positive earnings in the past year.
GGB had a positive operating cash flow in the past year.
GGB had positive earnings in each of the past 5 years.
In the past 5 years GGB always reported a positive cash flow from operatings.

1.2 Ratios

GGB has a Return On Assets of 15.45%. This is amongst the best in the industry. GGB outperforms 94.23% of its industry peers.
The Return On Equity of GGB (24.08%) is better than 92.31% of its industry peers.
GGB has a better Return On Invested Capital (18.83%) than 96.15% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GGB is significantly above the industry average of 8.76%.
The 3 year average ROIC (17.22%) for GGB is below the current ROIC(18.83%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 15.45%
ROE 24.08%
ROIC 18.83%
ROA(3y)13.41%
ROA(5y)9.39%
ROE(3y)22.94%
ROE(5y)16.45%
ROIC(3y)17.22%
ROIC(5y)12.77%

1.3 Margins

GGB's Profit Margin of 14.46% is amongst the best of the industry. GGB outperforms 83.97% of its industry peers.
GGB's Profit Margin has improved in the last couple of years.
The Operating Margin of GGB (19.56%) is better than 77.56% of its industry peers.
In the last couple of years the Operating Margin of GGB has grown nicely.
GGB has a better Gross Margin (21.25%) than 61.54% of its industry peers.
GGB's Gross Margin has improved in the last couple of years.
Industry RankSector Rank
OM 19.56%
PM (TTM) 14.46%
GM 21.25%
OM growth 3Y35.33%
OM growth 5Y27.01%
PM growth 3Y65.9%
PM growth 5YN/A
GM growth 3Y28.99%
GM growth 5Y18.44%

7

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.
GGB has more shares outstanding than it did 5 years ago.
The debt/assets ratio for GGB has been reduced compared to a year ago.

2.2 Solvency

GGB has an Altman-Z score of 3.33. This indicates that GGB is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.33, GGB is doing good in the industry, outperforming 64.74% of the companies in the same industry.
The Debt to FCF ratio of GGB is 2.18, which is a good value as it means it would take GGB, 2.18 years of fcf income to pay off all of its debts.
GGB has a better Debt to FCF ratio (2.18) than 82.05% of its industry peers.
A Debt/Equity ratio of 0.21 indicates that GGB is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.21, GGB is in line with its industry, outperforming 46.79% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.21
Debt/FCF 2.18
Altman-Z 3.33
ROIC/WACC1.41
WACC13.36%

2.3 Liquidity

A Current Ratio of 2.49 indicates that GGB has no problem at all paying its short term obligations.
GGB has a Current ratio (2.49) which is in line with its industry peers.
A Quick Ratio of 1.17 indicates that GGB should not have too much problems paying its short term obligations.
GGB's Quick ratio of 1.17 is on the low side compared to the rest of the industry. GGB is outperformed by 67.95% of its industry peers.
Industry RankSector Rank
Current Ratio 2.49
Quick Ratio 1.17

3

3. Growth

3.1 Past

The earnings per share for GGB have decreased strongly by -21.41% in the last year.
GGB shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 55.02% yearly.
GGB shows a decrease in Revenue. In the last year, the revenue decreased by -1.67%.
The Revenue has been growing by 17.42% on average over the past years. This is quite good.
EPS 1Y (TTM)-21.41%
EPS 3Y112.47%
EPS 5Y55.02%
EPS growth Q2Q-16.49%
Revenue 1Y (TTM)-1.67%
Revenue growth 3Y27.63%
Revenue growth 5Y17.42%
Revenue growth Q2Q-7.17%

3.2 Future

The Earnings Per Share is expected to decrease by -18.62% on average over the next years. This is quite bad
The Revenue is expected to grow by 0.35% on average over the next years.
EPS Next Y-25.69%
EPS Next 2Y-25.67%
EPS Next 3Y-18.62%
EPS Next 5YN/A
Revenue Next Year-12.29%
Revenue Next 2Y-7.53%
Revenue Next 3Y-4.54%
Revenue Next 5Y0.35%

3.3 Evolution

The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.

8

4. Valuation

4.1 Price/Earnings Ratio

GGB is valuated cheaply with a Price/Earnings ratio of 3.29.
Based on the Price/Earnings ratio, GGB is valued cheaper than 100.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.15, GGB is valued rather cheaply.
GGB is valuated cheaply with a Price/Forward Earnings ratio of 5.70.
GGB's Price/Forward Earnings ratio is rather cheap when compared to the industry. GGB is cheaper than 95.51% of the companies in the same industry.
GGB is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.62, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 3.29
Fwd PE 5.7

4.2 Price Multiples

GGB's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. GGB is cheaper than 96.79% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, GGB is valued cheaply inside the industry as 96.15% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 6.06
EV/EBITDA 2.21

4.3 Compensation for Growth

The excellent profitability rating of GGB may justify a higher PE ratio.
GGB's earnings are expected to decrease with -18.62% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)0.06
EPS Next 2Y-25.67%
EPS Next 3Y-18.62%

7

5. Dividend

5.1 Amount

GGB has a Yearly Dividend Yield of 5.31%, which is a nice return.
Compared to an average industry Dividend Yield of 3.28, GGB pays a better dividend. On top of this GGB pays more dividend than 91.67% of the companies listed in the same industry.
GGB's Dividend Yield is rather good when compared to the S&P500 average which is at 2.45.
Industry RankSector Rank
Dividend Yield 5.31%

5.2 History

The dividend of GGB is nicely growing with an annual growth rate of 131.13%!
GGB has been paying a dividend for at least 10 years, so it has a reliable track record.
GGB has decreased its dividend in the last 3 years.
Dividend Growth(5Y)131.13%
Div Incr Years2
Div Non Decr Years2

5.3 Sustainability

GGB pays out 50.26% of its income as dividend. This is a bit on the high side, but may be sustainable.
The Dividend Rate of GGB has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP50.26%
EPS Next 2Y-25.67%
EPS Next 3Y-18.62%

GERDAU SA -SPON ADR

NYSE:GGB (2/23/2024, 7:04:00 PM)

After market: 4.19 -0.09 (-2.1%)

4.28

-0.05 (-1.15%)

Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap7.49B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 5.31%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 3.29
Fwd PE 5.7
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)0.06
Profitability
Industry RankSector Rank
ROA 15.45%
ROE 24.08%
ROCE
ROIC
ROICexc
ROICexgc
OM 19.56%
PM (TTM) 14.46%
GM 21.25%
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.07
Health
Industry RankSector Rank
Debt/Equity 0.21
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 2.49
Quick Ratio 1.17
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-21.41%
EPS 3Y112.47%
EPS 5Y
EPS growth Q2Q
EPS Next Y-25.69%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-1.67%
Revenue growth 3Y27.63%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y