Head-To-Head Comparison: Gerdau (NYSE:GGB) and Compass Minerals International (NYSE:CMP)

Compass Minerals International (NYSE:CMP) and Gerdau (NYSE:GGB) are both materials companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Institutional & Insider Ownership

99.8% of Compass Minerals International shares are owned by institutional investors. Comparatively, 1.5% of Gerdau shares are owned by institutional investors. 1.0% of Compass Minerals International shares are owned by company insiders. Comparatively, 0.0% of Gerdau shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Compass Minerals International and Gerdau”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Compass Minerals International	$1.24 billion	0.76	-$79.80 million	$0.43	52.62
Gerdau	$12.51 billion	0.76	$248.41 million	$0.23	21.07

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

Risk and Volatility

Compass Minerals International has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500. Comparatively, Gerdau has a beta of 1.49, suggesting that its share price is 49% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Compass Minerals International and Gerdau, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Minerals International	2	2	1	0	1.80
Gerdau	0	6	2	1	2.44

Compass Minerals International currently has a consensus target price of $27.00, suggesting a potential upside of 19.32%. Gerdau has a consensus target price of $5.57, suggesting a potential upside of 15.07%. Given Compass Minerals International’s higher probable upside, equities analysts clearly believe Compass Minerals International is more favorable than Gerdau.

Profitability

This table compares Compass Minerals International and Gerdau’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Compass Minerals International	1.42%	12.75%	2.28%
Gerdau	3.37%	7.97%	5.18%

Summary

Gerdau beats Compass Minerals International on 8 of the 15 factors compared between the two stocks.

About Compass Minerals International

Compass Minerals International, Inc., provides essential minerals in the United States, Canada, the United Kingdom, and internationally. It operates through two segments, Salt and Plant Nutrition. The Salt segment produces, markets, and sells sodium chloride and magnesium chloride, including rock salt, mechanically and solar evaporated salt, and brine and flake magnesium chloride products; and purchases potassium chloride and calcium chloride to sell as finished products or to blend with sodium chloride to produce specialty products. This segment provides products for use as a deicer for roadways, consumer, and professional use; as an ingredient in chemical production; for water treatment, human, and animal nutrition; and for various other consumer and industrial uses, as well as records management services. The Plant Nutrition segment produces sulfate of potash specialty fertilizers in various grades that are used in broadcast spreaders, direct application, and liquid fertilizer solutions under the Protassium+ brand name; turf products used by the turf and ornamental markets, as well as for blends used on golf course greens; organic products; and develops and produces a portfolio of magnesium chloride-based aerial and ground fire retardant products. This segment provides its products to distributors and retailers of crop inputs, as well as growers. The company was formerly known as Salt Holdings Corporation and changed its name to Compass Minerals International, Inc. in December 2003. Compass Minerals International, Inc. was founded in 1844 and is headquartered in Overland Park, Kansas.

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.