Head-To-Head Contrast: NSK (OTCMKTS:NPSKY) versus Friedman Industries (NASDAQ:FRD)

NSK (OTCMKTS:NPSKY) and Friedman Industries (NASDAQ:FRD) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Insider and Institutional Ownership

33.3% of Friedman Industries shares are held by institutional investors. 5.5% of Friedman Industries shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Risk and Volatility

NSK has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500. Comparatively, Friedman Industries has a beta of 1.57, suggesting that its share price is 57% more volatile than the S&P 500.

Dividends

NSK pays an annual dividend of $0.26 per share and has a dividend yield of 1.7%. Friedman Industries pays an annual dividend of $0.16 per share and has a dividend yield of 0.9%. NSK pays out 61.9% of its earnings in the form of a dividend. Friedman Industries pays out 7.2% 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.

Analyst Ratings

This is a breakdown of current recommendations for NSK and Friedman Industries, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NSK	0	0	0	0	0.00
Friedman Industries	0	1	0	0	2.00

Earnings and Valuation

This table compares NSK and Friedman Industries”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NSK	$5.23 billion	0.71	$70.27 million	$0.42	36.19
Friedman Industries	$444.60 million	0.29	$6.09 million	$2.22	8.24

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NSK	N/A	N/A	N/A
Friedman Industries	2.68%	11.36%	5.86%

Summary

Friedman Industries beats NSK on 10 of the 15 factors compared between the two stocks.

About NSK

NSK Ltd., together with its subsidiaries, manufactures and sells industrial machinery bearings, automotive products, and precision machinery and parts worldwide. Its products include ball bearings; roller bearings; bearing units; super precision bearings; bearings for steel industry, mining and construction, papermaking machines, and pumps and compressors; and bearings for special environments, including sanitary, corrosive, vacuum, cleanroom, high-temperature, non-magnetic requirement, and dust-contaminated environments. The company also provides automotive products, which comprise chassis products, such as electric power steerings, steering column and intermediate shafts, brake systems, and hub unit bearings; power train products comprising engine parts and electrical accessories, automatic and manual transmission, products for motorcycles and all-terrain vehicles, half toroidal CVT POWERTOROS units, and differential gear and propeller shafts. In addition, it offers precision machine components, including ball screws, linear guides, monocarriers, XY tables, and spindles; and accessories, including ball screw support bearings, air bearings, and clean grease, as well as support units for heavy and light loads, machine tools, and small equipment. Further, the company provides megatorque motors and maintenance services. It serves agriculture, automotive, cement, food processing machinery, industrial motor, gearbox, injection molding machine, machine tool, medical device, mining and construction, motorcycle, office equipment, palm oil, papermaking machinery, pump and compressor, railway, semiconductor, steel, sugar, and wind turbine industries. NSK Ltd. was incorporated in 1916 and is headquartered in Tokyo, Japan.

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.