Comparing Century Aluminum (NASDAQ:CENX) & Friedman Industries (NASDAQ:FRD)

Century Aluminum (NASDAQ:CENX) and Friedman Industries (NASDAQ:FRD) are both small-cap industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, risk, dividends and institutional ownership.

Insider and Institutional Ownership

61.6% of Century Aluminum shares are held by institutional investors. Comparatively, 33.3% of Friedman Industries shares are held by institutional investors. 0.8% of Century Aluminum shares are held by insiders. Comparatively, 4.6% of Friedman Industries shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Century Aluminum and Friedman Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Century Aluminum	5.17%	19.06%	6.43%
Friedman Industries	1.37%	4.70%	2.80%

Risk & Volatility

Century Aluminum has a beta of 2.54, indicating that its share price is 154% more volatile than the S&P 500. Comparatively, Friedman Industries has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Century Aluminum	0	0	3	0	3.00
Friedman Industries	0	0	0	0	0.00

Century Aluminum presently has a consensus price target of $24.33, suggesting a potential upside of 43.90%. Given Century Aluminum’s stronger consensus rating and higher possible upside, research analysts clearly believe Century Aluminum is more favorable than Friedman Industries.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Century Aluminum	$2.22 billion	0.71	$336.80 million	$1.18	14.33
Friedman Industries	$444.60 million	0.27	$6.09 million	$0.86	19.43

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

Summary

Century Aluminum beats Friedman Industries on 12 of the 14 factors compared between the two stocks.

About Century Aluminum

Century Aluminum Company, together with its subsidiaries, engages in the production of standard-grade and value-added primary aluminum products in the United States and Iceland. It also owns and operates an alumina production facility in Iceland, and a carbon anode production facility in the Netherlands. The company was founded in 1995 and is headquartered in Chicago, Illinois.

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.