TM Editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

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Gerdau SA (GGB) produces steel and steel products. The company operates in civil construction, agriculture, automotive, iron ore, exports, research and development, and home steel products sectors.

It offers products such as nails, rebar, columns, billets, slabs, tribar tutor, mechanical construction bars, and reinforced steel locks. The company's geographical segments include: Brazil Operations; North America Operations; South America Operations as well as Special Steel Operations. It derives most of its revenue from the Brazil Operations segment.

It sells its products through independent distributors, direct sales from the mills, and its retail network. The company was founded in 1901 and is based in São Paulo, Brazil.

Three key data points gauge

Gerdau SA or any dividend-paying firm.

The key three are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.

GGB Price

Over the past year, Gerdau’s share price fell 8.35% from $4.67 to $4.28 as of Tuesday’s market close.

If GGB shares trade in the range of $4.00 to $6.00 this next year, its recent $4.28 share price might rise to $5.00 by next year. Of course, Gerdau’s price could drop about the same $0.72 estimated amount or more.

My annual upside estimate of $0.72 however, is in line with the median of one-year price targets estimated by 3 analysts tracking GGB for brokers.

GGB Dividend

Gerdau SA  has paid variable quarterly dividends since March 2000. GGB’s most recent Q dividend of $0.02 was declared February 22 to shareholders of record Mach 3rd and the payout was made on March 19th.

A forward-looking $0.25 annual dividend yields 5.84% at Tuesday’s $4.28 share price.

GGB Returns

To put it all together, add Gerdau SA estimated annual dividend of $0.25 to the estimated price upside of $0.72 to find a $0.97 gross gain.

At Friday’s $4.28 share price, a little over $1000 would buy 234 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, would cost us about $0.0425 per share.

Subtracting that likely $0.0425 brokerage cost from the $0.97 gross gain produces a net gain of $0.9275 X 234 shares = $217.04 for over a 21% estimated net gain on the year.

You might choose to pounce on Gerdau SA It is a 123-year-old dividend-paying Brazillian steel company.  Furthermore, the estimated $58.40 annual dividend income from $1k invested is 13.6 times greater than GGB’s recent $4.28 single share price.

The exact track of Gerdsu SA’s ongoing future price and dividend will be determined by market action.

Remember the true value of any stock is best realized through personal ownership of shares.

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