Analyzing Carpenter Technology Corporation (CRS) & Gerdau (GGB)

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Carpenter Technology Corporation and Gerdau, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Carpenter Technology Corporation 0 2 3 0 2.60
Gerdau 0 2 1 0 2.33

Carpenter Technology Corporation currently has a consensus target price of $43.40, suggesting a potential upside of 14.51%. Given Carpenter Technology Corporation’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Carpenter Technology Corporation is more favorable than Gerdau.

Profitability

This table compares Carpenter Technology Corporation and Gerdau’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Carpenter Technology Corporation 2.61% 4.48% 1.83%
Gerdau -5.26% -7.29% -3.38%

Risk & Volatility

Carpenter Technology Corporation has a beta of 2.08, meaning that its share price is 108% more volatile than the S&P 500. Comparatively, Gerdau has a beta of 2.35, meaning that its share price is 135% more volatile than the S&P 500.

Earnings and Valuation

This table compares Carpenter Technology Corporation and Gerdau’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Carpenter Technology Corporation $1.80 billion 0.99 $218.20 million $1.00 37.90
Gerdau $11.17 billion 0.36 $1.15 billion N/A N/A

Gerdau has higher revenue and earnings than Carpenter Technology Corporation.

Institutional and Insider Ownership

95.0% of Carpenter Technology Corporation shares are held by institutional investors. Comparatively, 5.0% of Gerdau shares are held by institutional investors. 3.6% of Carpenter Technology Corporation shares are held by insiders. Comparatively, 0.0% of Gerdau shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Carpenter Technology Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 1.9%. Gerdau pays an annual dividend of $0.01 per share and has a dividend yield of 0.3%. Carpenter Technology Corporation pays out 72.0% of its earnings in the form of a dividend.

Summary

Carpenter Technology Corporation beats Gerdau on 10 of the 15 factors compared between the two stocks.

About Carpenter Technology Corporation

Carpenter Technology Corporation is engaged in the manufacturing, fabrication and distribution of specialty metals. The Company’s segments include Specialty Alloys Operations (SAO) and Performance Engineered Products (PEP). Its SAO segment consists of alloy and stainless steel manufacturing operations. Its PEP segment includes the Dynamet titanium business, the Carpenter Powder Products business, the Amega West business, the Specialty Steel Supply business and the Latrobe and Mexico distribution businesses. It develops, manufactures and distributes cast/wrought and powder metal stainless steels, and special alloys, including high temperature (iron-nickel-cobalt base), stainless, corrosion resistant, controlled expansion alloys, ultra-high strength and implantable alloys, tool and die steels and other specialty metals, as well as cast/wrought titanium alloys. The Company manufactures and rents down-hole drilling tools and components used in the oil and gas industry.

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.

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