Major Drilling Group International (OTCMKTS:MJDLF) & Gerdau (NYSE:GGB) Head to Head Contrast

Gerdau (NYSE:GGB) and Major Drilling Group International (OTCMKTS:MJDLF) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, earnings, institutional ownership and profitability.

Institutional and Insider Ownership

1.5% of Gerdau shares are owned by institutional investors. Comparatively, 61.9% of Major Drilling Group International shares are owned by institutional investors. 0.0% of Gerdau shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Gerdau and Major Drilling Group International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gerdau	2.40%	6.76%	4.36%
Major Drilling Group International	N/A	N/A	N/A

Earnings & Valuation

This table compares Gerdau and Major Drilling Group International”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gerdau	$69.20 billion	0.15	$248.41 million	$0.16	31.34
Major Drilling Group International	N/A	N/A	N/A	($0.70)	-14.24

Gerdau has higher revenue and earnings than Major Drilling Group International. Major Drilling Group International is trading at a lower price-to-earnings ratio than Gerdau, indicating that it is currently the more affordable of the two stocks.

Dividends

Gerdau pays an annual dividend of $0.11 per share and has a dividend yield of 2.2%. Major Drilling Group International pays an annual dividend of $0.20 per share and has a dividend yield of 2.0%. Gerdau pays out 68.8% of its earnings in the form of a dividend. Major Drilling Group International pays out -28.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Analyst Recommendations

This is a breakdown of current recommendations for Gerdau and Major Drilling Group International, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gerdau	0	2	3	1	2.83
Major Drilling Group International	0	0	2	0	3.00

Gerdau currently has a consensus price target of $5.28, indicating a potential upside of 5.35%. Given Gerdau’s higher probable upside, analysts clearly believe Gerdau is more favorable than Major Drilling Group International.

Summary

Gerdau beats Major Drilling Group International on 11 of the 14 factors compared between the two stocks.

About Gerdau

Gerdau S.A., together with its subsidiaries, operates as a steel producer company. The company operates through Brazil Business, North America Business, South America Business, and Special Steel Business segments. It also provides semi-finished products, including billets, blooms, and slabs; common long rolled products, such as rebars, wire rods, merchant bars, light shapes, and profiles to the construction and manufacturing industries; drawn products comprising barbed and barbless fence wires, galvanized wires, fences, concrete reinforcing wire mesh, nails, and clamps for manufacturing, construction, and agricultural industries; and special steel products used in auto parts, light and heavy vehicles, and agricultural machinery, as well as in the oil and gas, wind energy, machinery and equipment, mining and rail, and other markets. In addition, the company offers flat products, such as hot-rolled steel coils and heavy plates; and resells flat steel products. Further, it operates mines that produce iron ore located in the Brazilian state of Minas Gerais. The company sells its products through independent distributors, direct sales from the mills, and its retail network. Gerdau S.A. was founded in 1901 and is based in São Paulo, Brazil.

About Major Drilling Group International

Major Drilling Group International Inc. provides contract drilling services for mining and mineral exploration companies. The company offers a suite of drilling services, including surface and underground coring, directional, reverse circulation, sonic, geotechnical, environmental, water-well, coal-bed methane, shallow gas, underground percussive, longhole drilling, surface drill and blast, and related mining services. The company was founded in 1980 and is headquartered in Moncton, Canada with additional offices in the United States, Mexico, South America, Asia, Africa, and Australia.