Gerdau Raises Quarterly Dividend 25.0% to $0.045

Gerdau S.A. raised its quarterly dividend to $0.045 per ADR from $0.036, an increase of 25.0%. The NYSE-listed shares traded ex-dividend on August 21, 2026.

Why the dividend changed

Gerdau announced the distribution alongside improved second-quarter results, although it did not attribute the increase to a single factor. Adjusted EBITDA reached R$3.4 billion, adjusted net income totaled R$1.5 billion and net revenue was R$17.9 billion. The company also generated R$237 million of positive free cash flow despite working-capital use and payments for interest and taxes. Those results supplied the earnings and cash context for the higher distribution. Gerdau’s second-quarter report

Chief Executive Gustavo Werneck said the quarter benefited from strong North American operations and a slight recovery in Brazil. The Brazilian improvement followed efforts to reshape assets around profitability and productivity, while the domestic market remained under pressure from steel imports. North America remained the main operational support for consolidated results. Gerdau’s results announcement

The dividend also sits within a broader capital-allocation program. Gerdau continued its share repurchases and maintained its investment program while ending the quarter with what it described as healthy leverage. It also completed the purchase of the remaining interest in Dona Francisca Energética, expanding renewable-energy self-production in Brazil and seeking lower structural energy costs. Second-quarter report Dona Francisca acquisition notice

Dividend track record

The latest increase extends a sharp recovery within 2026 rather than an uninterrupted record of annual growth. The three most recent payments rose from $0.019 with a March 12, 2026 ex-date to $0.036 with a May 15, 2026 ex-date and $0.045 with an August 21, 2026 ex-date. The annualized dividend is now $0.18, but Gerdau has no active annual growth streak.

Annual totals show why the distinction matters. Payments climbed from $0.05 in 2020 to $0.45 in 2021, a rise of 828.1%, and then to $0.56 in 2022, a rise of 25.3%. They subsequently fell 52.4% to $0.27 in 2023 and fell 47.1% to $0.14 in 2024. The 2025 total was $0.06 from three payments, a decline of 57.7%. The last recorded annual cut year is 2024. The pattern is variable and tied more closely to operating conditions than to a fixed annual increase.

Is the dividend covered?

The dividend consumes 58% of earnings. That indicates accounting earnings cover the distribution, but with less room than a low payout ratio would provide if steel-market conditions weaken or investment demands rise.

SmarterDividends gives the dividend a safety score of 60 and a grade of C. That falls in the borderline range of 50-65, reflecting adequate current earnings coverage alongside an uneven payment record and the steel industry’s cyclical operating profile.

Yield and valuation

At a share price of $4.79, the annualized $0.18 dividend produces a forward yield of 3.70%. That compares with a 1.88% median forward yield for the Basic Materials sector. The higher yield therefore comes with a payment history that has included substantial annual reductions.

SmarterDividends estimates fair value at $2.10 and classifies the shares as overvalued, equivalent to 58% downside from the reference price. The stock’s one-year price return is a 41.5% gain, which provides context for the gap between the market price and that estimate.

What to watch

Gerdau’s next quarterly report will show whether North American strength and the early Brazilian recovery continued while the company funded its investment program. Operational milestones include the planned start of the Miguel Burnier mining expansion and the Pindamonhangaba recycling center, as well as progress on the Midlothian, Texas, capacity expansion. Management has identified those projects as important to cost competitiveness and future operating performance. Gerdau’s second-quarter report

Capital allocation is the other focal point. Investors can track the balance among dividends, share repurchases, project spending and leverage, as well as the contribution from the completed Dona Francisca transaction. The next declared ADR distribution will also indicate whether the new $0.045 rate is sustained or remains part of Gerdau’s historically variable payment pattern.