GerdauElement Solutions

Gerdau vs Element Solutions

This page compares Gerdau S.A. and Element Solutions Inc. to explain their business models, financial performance, and market context in their respective sectors. The content is presented in a neutral...

Which Baskets Do They Appear In?

Brazil Investment Through Global Partners 2025

Brazil Investment Through Global Partners 2025

For Brazilians, investing in global companies with strong local operations may offer a way to manage domestic economic risks and currency fluctuations. This basket provides exposure to leading US and EU-listed blue-chip corporations that are deeply integrated into the Brazilian economy.

Published: October 8, 2025

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Brazilian Stocks

Brazilian Stocks

Ready to invest in Latin America's largest economy? These carefully selected Brazilian companies represent the backbone of a resource-rich nation that supplies essential commodities to the world. Each stock was chosen by professional analysts for its market leadership and growth potential.

Published: June 18, 2025

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Investment Analysis

Gerdau

Pros

  • North American operations are driving robust growth, with the region now contributing 65% of consolidated EBITDA amid strong steel demand and high capacity utilisation.
  • Strategic diversification across geographies reduces reliance on any single market, providing resilience against regional downturns such as current import pressures in Brazil.
  • The company has demonstrated disciplined capital allocation, returning 75% of net income to shareholders via dividends and buybacks while maintaining a healthy leverage ratio.

Considerations

  • The Brazilian business faces significant headwinds from high import penetration, which reached 25% in the first nine months of the year, pressuring local margins.
  • Steel production remains highly cyclical and exposed to global commodity price swings, potentially affecting profitability during industry downturns.
  • Despite recent gains, the overall steel sector faces long-term challenges from decarbonisation trends and potential shifts in global trade policies.
Element Solutions

Pros

  • Element Solutions operates in niche specialty chemicals markets with high technical barriers, supporting stable pricing and customer retention across diverse end markets.
  • The company benefits from recurring revenue streams tied to electronics, automotive, and industrial applications, reducing sensitivity to cyclical swings in raw material costs.
  • Element Solutions maintains a solid balance sheet, enabling flexibility for strategic acquisitions and investments in high-growth technology segments.

Considerations

  • The business is exposed to slowing demand in key sectors such as semiconductors and electronics, which may weigh on near-term growth prospects.
  • Intense competition from global and regional players could pressure margins, particularly if innovation or customer service differentiation falters.
  • Regulatory and environmental compliance costs are rising in the chemicals sector, potentially impacting profitability and operational flexibility over time.

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