Gerdau S.A. (GGB) vs Mechel PAO (MTL)

Gerdau S.A. and Mechel PAO are both Steel companies. Gerdau S.A. is the larger, with a market value of $5.9B against $1.2B — 4.9× the size. Mechel PAO trades at the lower P/E: 0.8× against 21.1×. Mechel PAO grew revenue faster over the last twelve months: 48.0% against 9.42%. Mechel PAO has the higher net margin (20.0% vs 3.40%) and the lower return on invested capital (0.00% vs 4.96%). Across the 21 metrics below, Mechel PAO leads on 15 and Gerdau S.A. on 6.

Valuation

Metric GGB MTL Steel median
P/E 21.09 0.84 21.10
P/S 0.72 0.10 0.70
P/B 0.90 n/m 1.39
Price to free cash flow 14.66 0.50 23.71
EV/EBITDA 6.69 2.62 10.71
EV/Sales 0.85 0.78 0.85
Earnings yield 4.74% 119.61% 4.56%
Free cash flow yield 6.82% 201.98% 0.00%

Profitability

Metric GGB MTL Steel median
Gross margin 13.16% 44.30% 13.91%
Operating margin 7.45% 0.00% 4.77%
Net margin 3.40% 20.04% 3.40%
Free cash flow margin 4.94% 23.08% 0.00%
Return on equity 4.39% (40.08%) 2.21%
Return on assets 2.84% 37.90% 1.83%
Return on invested capital 4.96% 0.00% 2.52%

Growth

Metric GGB MTL Steel median
Revenue growth (TTM) 9.42% 48.03% 11.33%
EPS growth (last fiscal year) (70.00%) 10,700.00% —
Revenue growth, 5-year CAGR 8.04% 5.72% 6.73%
Net income growth, 5-year CAGR (11.55%) 59.28% 0.00%

Health

Metric GGB MTL Steel median
Debt to equity 0.26 (1.81) 0.22
Current ratio 2.87 0.32 2.58
Net debt to EBITDA 1.07 2.26 0.10

Dividend

Metric GGB MTL Steel median
Dividend yield 7.52% — 2.48%
Payout ratio 0.65 0.00 0.04

Size

Metric GGB MTL Steel median
Market cap 5.94b 1.21b 1.46b

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