Comparing TriMas (NASDAQ:TRS) and Friedman Industries (NASDAQ:FRD)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
TriMas	3.36%	10.54%	5.24%
Friedman Industries	1.37%	4.70%	2.80%

Earnings & Valuation

This table compares TriMas and Friedman Industries”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TriMas	$925.01 million	1.38	$24.25 million	$0.77	40.82
Friedman Industries	$444.60 million	0.25	$6.09 million	$0.86	18.00

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

Dividends

TriMas pays an annual dividend of $0.16 per share and has a dividend yield of 0.5%. Friedman Industries pays an annual dividend of $0.16 per share and has a dividend yield of 1.0%. TriMas pays out 20.8% of its earnings in the form of a dividend. Friedman Industries pays out 18.6% 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 increased its dividend for 1 consecutive years. Friedman Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

TriMas has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, Friedman Industries has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for TriMas and Friedman Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TriMas	0	0	1	0	3.00
Friedman Industries	0	0	0	0	0.00

TriMas currently has a consensus target price of $40.00, indicating a potential upside of 27.27%. Given TriMas’ stronger consensus rating and higher probable upside, analysts plainly believe TriMas is more favorable than Friedman Industries.

Institutional and Insider Ownership

99.4% of TriMas shares are held by institutional investors. Comparatively, 33.3% of Friedman Industries shares are held by institutional investors. 14.2% of TriMas shares are held by company insiders. Comparatively, 4.6% of Friedman Industries shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

TriMas beats Friedman Industries on 12 of the 17 factors compared between the two stocks.

About TriMas

TriMas Corporation engages in the design, development, manufacture, and sale of products for consumer products, aerospace, and industrial markets worldwide. The company operates through Packaging, Aerospace, and Specialty Products segments. The Packaging segment offers dispensing products, such as foaming and sanitizer pumps, lotion and hand soap pumps, beverage dispensers, perfume sprayers, and nasal and trigger sprayers; polymeric and steel caps and closures comprising food lids, flip-top and beverage closures, child resistance caps, drum and pail closures, and flexible spouts; polymeric jar products; integrated dispensers; bag-in-box products; and consumable vascular delivery and diagnostic test components under the Rieke, Taplast, Affaba & Ferrari, Intertech, Omega, and Rapak brands. The Aerospace segment provides fasteners, collars, blind bolts, rivets, ducting, and connectors for air management systems, and other highly-machined parts and components to original equipment manufacturers, supply chain distributors, and tier one suppliers, as well as maintenance, repair and overhaul (MRO)/aftermarket providers; and military and defense aerospace applications and platforms under the Monogram Aerospace Fasteners, Allfast Fastening Systems, Mac Fasteners, TFI Aerospace, RSA Engineered Products, and Martinic Engineering brands. The Specialty Products segment offers steel cylinders for use in the transportation, storage, and dispensing of compressed gases under the Norris Cylinder brand; natural gas powered wellhead engines, compressors, and replacement parts for oil and natural gas production, and other industrial and commercial markets under the Arrow brand; and spare parts for various industrial engines. It sells its products through a direct sales force, third-party agents, and distributors. TriMas Corporation was incorporated in 1986 and is headquartered in Bloomfield Hills, Michigan.

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.