Ferrexpo (OTCMKTS:FEEXF) & Gerdau (NYSE:GGB) Critical Review

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

Institutional and Insider Ownership

1.5% of Gerdau shares are owned by institutional investors. Comparatively, 13.2% of Ferrexpo shares are owned by institutional investors. 0.0% of Gerdau shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Gerdau and Ferrexpo, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gerdau	0	0	2	0	3.00
Ferrexpo	0	0	0	0	N/A

Gerdau presently has a consensus price target of $5.00, suggesting a potential upside of 60.26%. Given Gerdau’s higher probable upside, analysts plainly believe Gerdau is more favorable than Ferrexpo.

Profitability

This table compares Gerdau and Ferrexpo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gerdau	7.88%	8.43%	5.63%
Ferrexpo	N/A	N/A	N/A

Valuation & Earnings

This table compares Gerdau and Ferrexpo”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gerdau	$64.60 billion	0.10	$1.50 billion	$0.61	5.11
Ferrexpo	N/A	N/A	N/A	N/A	N/A

Gerdau has higher revenue and earnings than Ferrexpo.

Summary

Gerdau beats Ferrexpo on 7 of the 8 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 Ferrexpo

Ferrexpo plc, together with its subsidiaries, mines for, develops, processes, produces, markets, exports, and sells iron ore pellets to the metallurgical industry. It operates two mines and a processing plant near Kremenchug in Ukraine; a port in Odessa; a fleet of vessels operating on the Rhine and Danube waterways; and an ocean-going vessel, which provides top-off services. The company also offers finance, management, procurement, trading, transportation, marketing, shipping, barging, bunker, and port services. It has operation in Turkey, rest of Europe, China, South East Asia, North East Asia, the Middle East, North Africa, and North America. The company was incorporated in 2005 and is headquartered in Baar, Switzerland.