Gerdau (NYSE: GGB) and Gibraltar Industries (NASDAQ:ROCK) are both basic materials companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, valuation, dividends, institutional ownership and earnings.

Volatility & Risk

Gerdau has a beta of 2.35, meaning that its share price is 135% more volatile than the S&P 500. Comparatively, Gibraltar Industries has a beta of 1.83, meaning that its share price is 83% more volatile than the S&P 500.

Insider and Institutional Ownership

5.0% of Gerdau shares are held by institutional investors. 0.0% of Gerdau shares are held by company insiders. Comparatively, 0.5% of Gibraltar Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

Gerdau pays an annual dividend of $0.01 per share and has a dividend yield of 0.3%. Gibraltar Industries does not pay a dividend.

Earnings & Valuation

This table compares Gerdau and Gibraltar Industries’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gerdau $11.52 billion 0.35 $1.17 billion N/A N/A
Gibraltar Industries $958.80 million 0.89 $109.22 million $0.71 37.96

Gerdau has higher revenue and earnings than Gibraltar Industries.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Gerdau and Gibraltar Industries, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gerdau 0 2 0 0 2.00
Gibraltar Industries 0 0 2 0 3.00

Gibraltar Industries has a consensus target price of $34.50, indicating a potential upside of 28.01%. Given Gibraltar Industries’ stronger consensus rating and higher possible upside, analysts clearly believe Gibraltar Industries is more favorable than Gerdau.

Profitability

This table compares Gerdau and Gibraltar Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gerdau -5.26% -7.00% -3.24%
Gibraltar Industries 2.38% 10.14% 5.09%

Summary

Gibraltar Industries beats Gerdau on 8 of the 14 factors compared between the two stocks.

About Gerdau

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.

About Gibraltar Industries

Gibraltar Industries, Inc. is a manufacturer and distributor of building products for industrial, transportation infrastructure, residential housing, renewable energy and resource conservation markets. The Company’s segments include Residential Products; Industrial and Infrastructure Products, and Renewable Energy and Conservation. The Residential Products segment services residential housing construction and residential repair and remodeling activity with products including roof and foundation ventilation products, rain dispersion products and roof ventilation accessories. The Industrial and Infrastructure Products segment focuses on a range of markets, including industrial and commercial construction, automotive, airports and energy and power generation markets with products. The Renewable Energy and Conservation segment focuses on the design, engineering, manufacturing and installation of solar racking systems and commercial, institutional and retail greenhouse structures.

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