Financial Comparison: Voestalpine (OTCMKTS:VLPNY) vs. Friedman Industries (NASDAQ:FRD)

Friedman Industries (NASDAQ:FRD) and Voestalpine (OTCMKTS:VLPNY) are both materials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, profitability, risk, valuation and earnings.

Dividends

Friedman Industries pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. Voestalpine pays an annual dividend of $0.09 per share and has a dividend yield of 0.9%. Friedman Industries pays out 4.2% of its earnings in the form of a dividend. Voestalpine pays out 12.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Friedman Industries has increased its dividend for 1 consecutive years.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Friedman Industries and Voestalpine, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Friedman Industries	0	0	1	0	3.00
Voestalpine	1	2	3	0	2.33

Volatility & Risk

Friedman Industries has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500. Comparatively, Voestalpine has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Profitability

This table compares Friedman Industries and Voestalpine’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Friedman Industries	3.63%	18.29%	8.19%
Voestalpine	3.39%	6.66%	3.30%

Earnings and Valuation

This table compares Friedman Industries and Voestalpine”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Friedman Industries	$646.91 million	0.47	$19.53 million	$3.84	11.02
Voestalpine	$17.47 billion	0.49	$492.57 million	$0.70	14.24

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

Institutional & Insider Ownership

33.3% of Friedman Industries shares are owned by institutional investors. 6.6% of Friedman Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Friedman Industries beats Voestalpine on 10 of the 16 factors compared between the two stocks.

About Friedman Industries

Friedman Industries, Incorporated engages in steel processing, pipe manufacturing and processing, and the steel and pipe distribution businesses the United States. It operates in two segments, Coil and Tubular. The Coil segment is involved in the conversion of steel coils into flat sheet and plate steel cut to customer specifications and reselling steel coils. This segment also processes customer-owned coils on a fee basis. The company sells coil products and processing services to approximately 200 customers located primarily in the midwestern, southwestern and southeastern regions of the United States. Its principal customers for these products and services are steel distributors and customers manufacturing steel products, such as steel buildings, railroad cars, barges, tanks and containers, trailers, component parts and other fabricated steel products. The Tubular segment manufactures line and oil country pipes, as well as pipes for structural applications. This segment sells its tubular products principally to steel and pipe distributors through its own sales force. The company was incorporated in 1965 and is headquartered in Longview, Texas.

About Voestalpine

Voestalpine AG processes, develops, manufactures, and sells steel products in Austria, European Union, and internationally. The company operates through five segments: Steel, High Performance Metals, Metal Engineering, Metal Forming, and Other. The Steel division produces hot and cold-rolled steel strips, as well as electrogalvanized, hot-dip galvanized, and organically coated steel strips; and heavy plates for the energy sector, as well as turbine casings for automotive, white goods/consumer goods, building/construction, energy, mechanical engineering, and others. The High Performance Metals segment offers special alloys for the oil and natural gas, aerospace, and energy engineering industries; tool manufacturing, component processing, heat treatment, and coating services; and warehousing and preprocessing of special steels, as well as services, including logistics, distribution, and processing for the oil and natural gas industries for automotive, white goods/consumer goods, building/construction, aerospace, mechanical engineering, and others. The Metal Engineering division offers rails and turnout products, rod and drawn wires, seamless tubes, and welding consumables and machinery; rails and digital monitoring systems; and services for rail infrastructure. This segment serves railway systems, automotive, white goods/consumer goods, building/construction, energy, mechanical engineering, and others. The Metal Forming division manufactures special tubes and sections, and precision strip steel products, as well as pre-finished system components made from pressed, stamped, and roll-profiled parts for use in automotive, white goods/consumer goods, building/construction, energy, mechanical engineering, and others. The company is headquartered in Linz, Austria.