Gerdau S.A. (GGB) vs Ternium S.A. (TX)

Gerdau S.A. and Ternium S.A. are both Steel companies. Ternium S.A. is the larger, with a market value of $10.9B against $5.9B — 1.8× the size. Ternium S.A. trades at the lower P/E: 15.6× against 21.1×. Gerdau S.A. grew revenue faster over the last twelve months: 9.42% against −1.43%. Ternium S.A. has the higher net margin (4.37% vs 3.40%) and the lower return on invested capital (4.39% vs 4.96%). Both pay a dividend; Gerdau S.A. yields more (7.52% vs 7.42%). Across the 21 metrics below, Ternium S.A. leads on 14 and Gerdau S.A. on 7.

Valuation

Metric GGB TX Steel median
P/E 21.09 15.58 21.10
P/S 0.72 0.68 0.70
P/B 0.90 0.65 1.39
Price to free cash flow 14.66 n/m 23.71
EV/EBITDA 6.69 5.64 10.71
EV/Sales 0.85 0.70 0.85
Earnings yield 4.74% 6.42% 4.56%
Free cash flow yield 6.82% (4.32%) 0.00%

Profitability

Metric GGB TX Steel median
Gross margin 13.16% 17.75% 13.91%
Operating margin 7.45% 7.45% 4.77%
Net margin 3.40% 4.37% 3.40%
Free cash flow margin 4.94% (2.94%) 0.00%
Return on equity 4.39% 4.20% 2.21%
Return on assets 2.84% 2.89% 1.83%
Return on invested capital 4.96% 4.39% 2.52%

Growth

Metric GGB TX Steel median
Revenue growth (TTM) 9.42% (1.43%) 11.33%
EPS growth (last fiscal year) (70.00%) 903.70% —
Revenue growth, 5-year CAGR 8.04% 12.31% 6.73%
Net income growth, 5-year CAGR (11.55%) (11.39%) 0.00%

Health

Metric GGB TX Steel median
Debt to equity 0.26 0.18 0.22
Current ratio 2.87 2.58 2.58
Net debt to EBITDA 1.07 (0.41) 0.10

Dividend

Metric GGB TX Steel median
Dividend yield 7.52% 7.42% 2.48%
Payout ratio 0.65 0.44 0.04

Size

Metric GGB TX Steel median
Market cap 5.94b 10.90b 1.46b

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