Critical Analysis: SunCoke Energy (SXC) & Gerdau (GGB)
SunCoke Energy (NYSE: SXC) and Gerdau (NYSE:GGB) are both oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.
Gerdau pays an annual dividend of $0.01 per share and has a dividend yield of 0.3%. SunCoke Energy does not pay a dividend. Gerdau pays out -3.2% of its earnings in the form of a dividend. SunCoke Energy has increased its dividend for 2 consecutive years.
Risk & Volatility
SunCoke Energy has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500. Comparatively, Gerdau has a beta of 2.31, suggesting that its share price is 131% more volatile than the S&P 500.
Earnings and Valuation
This table compares SunCoke Energy and Gerdau’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|SunCoke Energy||$1.25 billion||0.47||$226.00 million||N/A||N/A|
|Gerdau||$10.98 billion||0.36||$1.13 billion||($0.31)||-11.00|
Gerdau has higher revenue and earnings than SunCoke Energy.
This is a summary of recent recommendations for SunCoke Energy and Gerdau, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
SunCoke Energy currently has a consensus target price of $11.00, suggesting a potential upside of 19.96%. Given SunCoke Energy’s stronger consensus rating and higher probable upside, equities research analysts clearly believe SunCoke Energy is more favorable than Gerdau.
This table compares SunCoke Energy and Gerdau’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider & Institutional Ownership
90.2% of SunCoke Energy shares are owned by institutional investors. Comparatively, 5.3% of Gerdau shares are owned by institutional investors. 3.9% of SunCoke Energy 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, hedge funds and large money managers believe a company is poised for long-term growth.
About SunCoke Energy
SunCoke Energy, Inc. is a producer of coke in the Americas. The Company’s segments include Domestic Coke, Brazil Coke, Coal Logistics, and Corporate and Other. The Domestic Coke segment consists of its Jewell Coke Company, L.P. (Jewell), Indiana Harbor Coke Company (Indiana Harbor), Haverhill Coke Company LLC (Haverhill), Gateway Energy and Coke Company, LLC (Granite City) and Middletown Coke Company, LLC (Middletown) cokemaking and heat recovery operations. The Brazil Coke segment consists of its operations in Vitoria, Brazil, where the Company operate a cokemaking facility, ArcelorMittal Brasil S.A. The Coal Logistics segment consists of its Convent Marine Terminal (CMT), Kanawha River Terminals, LLC (KRT), SunCoke Lake Terminal, LLC (Lake Terminal) and Dismal River Terminal, LLC (DRT) coal handling and/or mixing service operations. It designs, develops, builds, owns and operates five cokemaking facilities in the United States, as of December 31, 2016.
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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