Dallas, Texas 10/18/2013 (Financialstrend) – Gerdau SA (ADR) (NYSE:GGB) is a $13.54 billion sized large cap which is into steel and iron manufacturing from its operations in Brazil. It traces back its continuous operations 110 years back and has operational mines spread across 12 nations in 3 different continents. The company has issued 1.7 billion shares outstanding of which 573 million shares is preferred stock. The stock is listed on three different stock exchanges.
In the past 12 months trailing period, Brazil’s largest long steel manufacturing company has posted sales of $17.42 billion and generated net income of $487 million. The company as a policy pays out 30% of the net income it generates from operations after adjustments. Over the trailing 12 months period, it has funnelled back 31.6% of its total net income after adjustments to its share holders in the form of dividends. This translates to a dividend yield of 1.3%. This represents a 45% dip in annual yield when compared to previous year. The steel maker also offers its share holders a option to reinvest their earnings back into company stock. Such investors can either take the ADR route or sign up for automatic reinvest of dividend into shares.
An insight into the future potential of the steel giant can be had by delving into the Morgan Stanley’s rating report on Gerdau dated October 2. Morgan Stanley has an overweight recommendation on the stock with a target price of $21.8. As of close of business on October 17, the stock was trading at $7.96 per share down 3.4% from its previous day close. At these price levels, the share price is indicative of a 51% appreciation on its 52 week low pricing. In spite of vast improvements in its operational efficiencies, sales for previous quarter dipped by 0.9%. In spite of the dip the stock has appreciated by 7.42%.