New Found Gold (NYSE:NFGC – Get Free Report) and Friedman Industries (NASDAQ:FRD – Get Free Report) are both small-cap materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.
Analyst Recommendations
This is a breakdown of current recommendations and price targets for New Found Gold and Friedman Industries, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| New Found Gold | 0 | 1 | 0 | 0 | 2.00 |
| Friedman Industries | 0 | 0 | 1 | 0 | 3.00 |
Earnings and Valuation
This table compares New Found Gold and Friedman Industries”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| New Found Gold | $31.42 million | 21.49 | -$59.18 million | ($0.20) | -8.75 |
| Friedman Industries | $646.91 million | 0.44 | $19.53 million | $3.84 | 10.24 |
Friedman Industries has higher revenue and earnings than New Found Gold. New Found Gold is trading at a lower price-to-earnings ratio than Friedman Industries, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
3.4% of New Found Gold shares are held by institutional investors. Comparatively, 33.3% of Friedman Industries shares are held by institutional investors. 6.6% of Friedman Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Profitability
This table compares New Found Gold and Friedman Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| New Found Gold | N/A | -82.80% | -68.88% |
| Friedman Industries | 3.63% | 18.29% | 8.19% |
Volatility and Risk
New Found Gold has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500. Comparatively, Friedman Industries has a beta of 1.62, suggesting that its stock price is 62% more volatile than the S&P 500.
Summary
Friedman Industries beats New Found Gold on 12 of the 13 factors compared between the two stocks.
About New Found Gold
New Found Gold Corp., a mineral exploration company, engages in the identification, evaluation, acquisition, and exploration of mineral properties in the Provinces of Newfoundland and Labrador, and Ontario. It primarily explores for gold deposit. The company holds 100% interests in the Queensway project that includes 96 mineral licenses and 6,659 claims covering an area of 166,475 hectares of land located near Gander, Newfoundland; and the Kingsway project located in Gander, Newfoundland. The company was formerly known as Palisade Resources Corp. and changed its name to New Found Gold Corp. in June 2017. New Found Gold Corp. was incorporated in 2016 and is headquartered in Vancouver, Canada.
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.
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