Reviewing Friedman Industries (FRD) & Its Rivals

Institutional and Insider Ownership

33.3% of Friedman Industries shares are held by institutional investors. Comparatively, 57.2% of shares of all “METAL PROC&FABR” companies are held by institutional investors. 4.6% of Friedman Industries shares are held by company insiders. Comparatively, 12.0% of shares of all “METAL PROC&FABR” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Friedman Industries and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Friedman Industries	1.37%	4.70%	2.80%
Friedman Industries Competitors	-11.34%	-7.25%	2.12%

Volatility & Risk

Friedman Industries has a beta of 1.48, suggesting that its share price is 48% more volatile than the S&P 500. Comparatively, Friedman Industries’ competitors have a beta of 1.00, suggesting that their average share price is 0% less volatile than the S&P 500.

Valuation & Earnings

This table compares Friedman Industries and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Friedman Industries	$444.60 million	$6.09 million	19.38
Friedman Industries Competitors	$2.03 billion	$107.04 million	6.12

Friedman Industries’ competitors have higher revenue and earnings than Friedman Industries. Friedman Industries is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

Friedman Industries pays an annual dividend of $0.16 per share and has a dividend yield of 1.0%. Friedman Industries pays out 18.6% of its earnings in the form of a dividend. As a group, “METAL PROC&FABR” companies pay a dividend yield of 1.6% and pay out 39.1% of their earnings in the form of a dividend. Friedman Industries has increased its dividend for 1 consecutive years.

Summary

Friedman Industries beats its competitors on 6 of the 11 factors compared.

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.