Contrasting Valmont Industries (NYSE:VMI) and Omega Flex (NASDAQ:OFLX)

Omega Flex (NASDAQ:OFLX) and Valmont Industries (NYSE:VMI) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, risk, earnings, profitability, analyst recommendations, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Omega Flex and Valmont Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Omega Flex	0	0	0	0	0.00
Valmont Industries	0	1	2	0	2.67

Valmont Industries has a consensus price target of $362.50, suggesting a potential upside of 7.97%. Given Valmont Industries’ stronger consensus rating and higher probable upside, analysts plainly believe Valmont Industries is more favorable than Omega Flex.

Dividends

Omega Flex pays an annual dividend of $1.36 per share and has a dividend yield of 3.9%. Valmont Industries pays an annual dividend of $2.72 per share and has a dividend yield of 0.8%. Omega Flex pays out 79.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Valmont Industries pays out 15.8% of its earnings in the form of a dividend. Omega Flex has increased its dividend for 7 consecutive years and Valmont Industries has increased its dividend for 1 consecutive years. Omega Flex is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Omega Flex has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, Valmont Industries has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500.

Earnings & Valuation

This table compares Omega Flex and Valmont Industries”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Omega Flex	$101.68 million	3.45	$18.01 million	$1.72	20.24
Valmont Industries	$4.08 billion	1.65	$348.26 million	$17.18	19.54

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

Profitability

This table compares Omega Flex and Valmont Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Omega Flex	17.40%	21.09%	16.89%
Valmont Industries	8.55%	22.27%	10.09%

Institutional and Insider Ownership

36.1% of Omega Flex shares are owned by institutional investors. Comparatively, 87.8% of Valmont Industries shares are owned by institutional investors. 65.2% of Omega Flex shares are owned by company insiders. Comparatively, 1.5% of Valmont Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Valmont Industries beats Omega Flex on 10 of the 17 factors compared between the two stocks.

About Omega Flex

Omega Flex, Inc., together with its subsidiaries, manufactures and sells flexible metal hoses and accessories in North America and internationally. It offers flexible gas piping for use in residential and commercial buildings; fittings; containment pining; and corrugated medical tubing for use in hospitals, ambulatory care centers, dental, physician and veterinary clinics, laboratories, and other facilities. The company sells its products under the TracPipe, CounterStrike, AutoSnap, AutoFlare, DoubleTrac, DEF-Trac, and MediTrac brand names. It serves various markets, including construction, manufacturing, transportation, petrochemical, pharmaceutical, and other industries. The company sells its products through independent sales representatives, distributors, fabricating distributors, wholesalers, original equipment manufacturers, and direct sales, as well as through its website. The company was formerly known as Tofle America, Inc. and changed its name to Omega Flex, Inc. in 1996. Omega Flex, Inc. was incorporated in 1975 and is based in Exton, Pennsylvania.

About Valmont Industries

Valmont Industries, Inc. operates as manufacturer of products and services for infrastructure and agriculture markets in the United States, Australia, Brazil, and internationally. It operates through two segments, Infrastructure and Agriculture. The company manufactures and distributes steel, pre-stressed concrete, composite structures for electrical transmission, substation, and distribution applications; and designs, engineers, and manufactures metal, steel, wood, aluminum, and composite poles and structures for lighting and transportation applications. It also offers galvanizing, anodizing, painting, and powder coating services for paint products; towers, small cell structures, camouflage concealment solutions, passive intermodulation mitigation equipment, and components for wireless communication markets; and solar single-axis tracker product, an integrated system of steel structures, electric motors, and electronic controllers, as well as provides coatings services to preserve metal products. In addition, the company manufactures center pivot components and linear irrigation equipment for the agricultural markets, such as parts and tubular products for industrial customers; advanced technology solutions for agricultural sector; mechanical irrigation equipment and service parts under the Valley brand name. It serves municipalities and government entities, commercial lighting fixtures manufacturing companies, contractors, telecommunications and utility companies, and farmers, as well as the general manufacturing sector. Valmont Industries, Inc. was founded in 1946 and is headquartered in Omaha, Nebraska.