Analyzing Gerdau (NYSE:GGB) & Ramaco Resources (NASDAQ:METC)

Ramaco Resources (NASDAQ:METC) and Gerdau (NYSE:GGB) are both materials companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Institutional & Insider Ownership

74.5% of Ramaco Resources shares are owned by institutional investors. Comparatively, 1.5% of Gerdau shares are owned by institutional investors. 46.1% of Ramaco Resources shares are owned by company insiders. Comparatively, 0.0% of Gerdau shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Ramaco Resources has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500. Comparatively, Gerdau has a beta of 1.49, suggesting that its stock price is 49% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Ramaco Resources and Gerdau, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ramaco Resources	2	3	3	1	2.33
Gerdau	0	6	2	1	2.44

Ramaco Resources presently has a consensus target price of $22.43, indicating a potential upside of 143.26%. Gerdau has a consensus target price of $5.57, indicating a potential upside of 12.74%. Given Ramaco Resources’ higher possible upside, equities analysts plainly believe Ramaco Resources is more favorable than Gerdau.

Profitability

This table compares Ramaco Resources and Gerdau’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ramaco Resources	-11.98%	-13.54%	-6.01%
Gerdau	3.37%	7.97%	5.18%

Valuation & Earnings

This table compares Ramaco Resources and Gerdau”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ramaco Resources	$536.62 million	1.09	-$51.45 million	($1.07)	-8.62
Gerdau	$12.51 billion	0.78	$248.41 million	$0.23	21.50

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

Summary

Gerdau beats Ramaco Resources on 9 of the 14 factors compared between the two stocks.

About Ramaco Resources

Ramaco Resources, Inc. engages in the development, operation, and sale of metallurgical coal. Its development portfolio includes the Elk Creek project that covers an area of approximately 20,200 acres located in southern West Virginia; the Berwind property covering an area of approximately 62,500 acres situated on the border of West Virginia and Virginia; the Knox Creek property, which covers an area of approximately 64,050 acres is located in Virginia; the Maben property covering an area of approximately 28,000 acres situated in southwestern Pennsylvania southern West Virginia; and the Brook Mine property that covers an area of approximately 16,000 acres located in northeastern Wyoming. The company serves blast furnace steel mills and coke plants in the United States, as well as metallurgical coal consumers internationally. Ramaco Resources, Inc. was founded in 2015 and is headquartered in Lexington, Kentucky.

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.