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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, 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 the revenue from the Brazil Operations segment.
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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 rose 36.65% from $4.31 to $5.90 as of Monday’s market close.
If Gerdau’s stock trades in the range of $4.00 to $8.00 this next year, its recent $5.90 share price might rise to $6.50 by next year. Of course, Gerdau’s price could drop about the same $0.60 amount, or more.
My upside estimate of $0.60, however, is $0.38 below the median of 1 yr targets of 5analysts tracking the stock for brokers. However the average annual stock price increase has been about $0.23 over the past twenty years.
GGB Dividend
Gerdau’s most recent $0.10 quarterly dividend, paid June 6th to shareholders of record May 16th, equates to about $0.65 annually to throw a yield of 11.03% as of Monday’s closing price.Gerdau’s Q dividend varied between $0.38 and $0.04 last year.
GGB Returns
Adding the $0.65 anticipated annual dividend to Gerdau’s estimated $0.60 price upside, reveals a $1.25 potential gross gain per share for the coming year.
At Monday’s $5.90 closing price, a little under $1000 would buy 169 shares.
A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $0.06 per share.
Subtracting that maybe $0.06 brokerage cost from my estimated $1.25 gross gain per share makes a net gain amounting to $1.19 X 169 shares = $201.11 for about a 20.1% net gain.
This may be the time to pounce on Gerdau SA. But beware, Gerdau’s Q dividend is highly variable, and its price is recovering from a recent low of $3.87 as of last July after achieving a near $7 highin May, 2021. So, expect volatility in both price and dividend from GBB.
The foregoing article is based on past history of Gerdau SA. The only accurate measure of future performance is from active investment in the company.
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