Contrasting DPM Metals (OTCMKTS:DPMLF) and Friedman Industries (NASDAQ:FRD)

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

Earnings & Valuation

This table compares Friedman Industries and DPM Metals”s top-line 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	10.93
DPM Metals	$950.48 million	9.60	$369.23 million	$3.04	13.69

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

Dividends

Friedman Industries pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. DPM Metals pays an annual dividend of $0.16 per share and has a dividend yield of 0.4%. Friedman Industries pays out 4.2% of its earnings in the form of a dividend. DPM Metals pays out 5.3% 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 raised its dividend for 1 consecutive years.

Profitability

This table compares Friedman Industries and DPM Metals’ 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%
DPM Metals	50.26%	25.66%	21.67%

Institutional & Insider Ownership

33.3% of Friedman Industries shares are owned by institutional investors. 6.6% of Friedman Industries shares are owned by insiders. Comparatively, 0.3% of DPM Metals shares are owned by 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.

Risk and Volatility

Friedman Industries has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500. Comparatively, DPM Metals has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Friedman Industries and DPM Metals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Friedman Industries	0	0	1	0	3.00
DPM Metals	0	2	3	0	2.60

Summary

DPM Metals beats Friedman Industries on 9 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 DPM Metals

Dundee Precious Metals Inc., a gold mining company, engages in the acquisition, exploration, development, mining, and processing of precious metals. The company primarily explores for gold, copper, and silver deposits. It holds a portfolio of projects located in Bulgaria, Namibia, Serbia, and Ecuador. The company is based in Toronto, Canada.