GERDAU SA -SPON ADR (GGB) Stock Fundamental Analysis
NYSE:GGB - New York Stock Exchange, Inc. - US3737371050 - ADR - Currency: USD
Taking everything into account, GGB scores 7 out of 10 in our fundamental rating. GGB was compared to 154 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. A decent growth rate in combination with a cheap valuation! Better keep an eye on GGB. These ratings would make GGB suitable 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.
Each year in the past 5 years GGB has been profitable.
Each year in the past 5 years GGB had a positive operating cash flow.
1.2 Ratios
The Return On Assets of GGB (3.82%) is better than 71.43% of its industry peers.
GGB has a Return On Equity of 5.84%. This is in the better half of the industry: GGB outperforms 70.13% of its industry peers.
GGB has a Return On Invested Capital of 6.56%. This is in the better half of the industry: GGB outperforms 69.48% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for GGB is above the industry average of 11.67%.
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 70.78% of the companies in the same industry.
In the last couple of years the Profit Margin of GGB has grown nicely.
GGB has a Operating Margin of 8.54%. This is in the better half of the industry: GGB outperforms 64.94% of its industry peers.
In the last couple of years the Operating Margin of GGB has grown nicely.
GGB has a Gross Margin (12.80%) which is in line with its industry peers.
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.
GGB has less shares outstanding than it did 1 year ago.
GGB has less shares outstanding than it did 5 years ago.
GGB has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.38 indicates that GGB is not a great score, but indicates only limited risk for bankruptcy at the moment.
GGB has a Altman-Z score of 2.38. This is comparable to the rest of the industry: GGB outperforms 49.35% of its industry peers.
The Debt to FCF ratio of GGB is 3.25, which is a good value as it means it would take GGB, 3.25 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.25, GGB is in the better half of the industry, outperforming 74.68% of the companies in the same industry.
A Debt/Equity ratio of 0.24 indicates that GGB is not too dependend on debt financing.
With a Debt to Equity ratio value of 0.24, GGB perfoms like the industry average, outperforming 45.45% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 3.25 | ||
| Altman-Z | 2.38 |
ROIC/WACC0.53
WACC12.43%
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.
GGB has a Current ratio (2.64) which is comparable to the rest of the industry.
GGB has a Quick Ratio of 1.28. This is a normal value and indicates that GGB is financially healthy and should not expect problems in meeting its short term obligations.
GGB has a Quick ratio of 1.28. This is comparable to the rest of the industry: GGB outperforms 44.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.64 | ||
| Quick Ratio | 1.28 |
3. Growth
3.1 Past
GGB shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -32.46%.
The Earnings Per Share has been growing by 23.61% on average over the past years. This is a very strong growth
Looking at the last year, GGB shows a small growth in Revenue. The Revenue has grown by 2.92% in the last year.
The Revenue has been growing by 11.07% on average over the past years. This is quite good.
EPS 1Y (TTM)-32.46%
EPS 3Y-36.8%
EPS 5Y23.61%
EPS Q2Q%-36.21%
Revenue 1Y (TTM)2.92%
Revenue growth 3Y-5.07%
Revenue growth 5Y11.07%
Sales Q2Q%7.19%
3.2 Future
The Earnings Per Share is expected to grow by 10.35% on average over the next years. This is quite good.
GGB is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.19% yearly.
EPS Next Y18.53%
EPS Next 2Y11.11%
EPS Next 3Y10.35%
EPS Next 5YN/A
Revenue Next Year4.8%
Revenue Next 2Y5.4%
Revenue Next 3Y5.62%
Revenue Next 5Y7.19%
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.
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.
4. Valuation
4.1 Price/Earnings Ratio
GGB is valuated reasonably with a Price/Earnings ratio of 9.21.
Compared to the rest of the industry, the Price/Earnings ratio of GGB indicates a rather cheap valuation: GGB is cheaper than 96.10% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.45, GGB is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 6.76, the valuation of GGB can be described as very cheap.
GGB's Price/Forward Earnings ratio is rather cheap when compared to the industry. GGB is cheaper than 89.61% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.90. GGB is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.21 | ||
| Fwd PE | 6.76 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, GGB is valued cheaply inside the industry as 92.86% of the companies are valued more expensively.
GGB's Price/Free Cash Flow ratio is rather cheap when compared to the industry. GGB is cheaper than 94.81% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.01 | ||
| EV/EBITDA | 4.65 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
GGB has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)0.5
PEG (5Y)0.39
EPS Next 2Y11.11%
EPS Next 3Y10.35%
5. Dividend
5.1 Amount
GGB has a Yearly Dividend Yield of 2.49%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.98, GGB pays a better dividend. On top of this GGB pays more dividend than 86.36% of the companies listed in the same industry.
GGB's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
5.2 History
On average, the dividend of GGB grows each year by 28.72%, which is quite nice.
GGB has paid a dividend for at least 10 years, which is 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 2Y11.11%
EPS Next 3Y10.35%
3.13
+0.08 (+2.62%)
Chartmill FA Rating
GICS SectorMaterials
GICS IndustryGroupMaterials
GICS IndustryMetals & Mining
Earnings (Last)
Earnings (Next)
Inst Owners28.16%
Inst Owner Change-4.13%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap6.29B
Analysts80
Price Target4.28 (36.74%)
Short Float %1.02%
Short Ratio0.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
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)5.02%
PT rev (3m)-4.03%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-3.57%
EPS NY rev (1m)0%
EPS NY rev (3m)3.62%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.5%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.21 | ||
| Fwd PE | 6.76 | ||
| P/S | 0.51 | ||
| P/FCF | 7.01 | ||
| P/OCF | 3.01 | ||
| P/B | 0.62 | ||
| P/tB | 0.81 | ||
| EV/EBITDA | 4.65 |
EPS(TTM)0.34
EY10.86%
EPS(NY)0.46
Fwd EY14.8%
FCF(TTM)0.45
FCFY14.27%
OCF(TTM)1.04
OCFY33.23%
SpS6.19
BVpS5.09
TBVpS3.88
PEG (NY)0.5
PEG (5Y)0.39
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 | 2.38 |
F-Score3
WACC12.43%
ROIC/WACC0.53
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)-32.46%
EPS 3Y-36.8%
EPS 5Y23.61%
EPS Q2Q%-36.21%
EPS Next Y18.53%
EPS Next 2Y11.11%
EPS Next 3Y10.35%
EPS Next 5YN/A
Revenue 1Y (TTM)2.92%
Revenue growth 3Y-5.07%
Revenue growth 5Y11.07%
Sales Q2Q%7.19%
Revenue Next Year4.8%
Revenue Next 2Y5.4%
Revenue Next 3Y5.62%
Revenue Next 5Y7.19%
EBIT growth 1Y-22.86%
EBIT growth 3Y-30.82%
EBIT growth 5Y14.4%
EBIT Next Year34.22%
EBIT Next 3Y17.15%
EBIT Next 5Y13.41%
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%