Wheaton Precious Metals (NYSE:WPM) vs. Friedman Industries (NASDAQ:FRD) Head-To-Head Survey

Wheaton Precious Metals (NYSE:WPM) and Friedman Industries (NASDAQ:FRD) are both materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Profitability

This table compares Wheaton Precious Metals and Friedman Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Wheaton Precious Metals	65.55%	20.20%	19.28%
Friedman Industries	3.02%	13.70%	6.63%

Volatility & Risk

Wheaton Precious Metals has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Friedman Industries has a beta of 1.57, indicating that its stock price is 57% more volatile than the S&P 500.

Insider and Institutional Ownership

70.3% of Wheaton Precious Metals shares are held by institutional investors. Comparatively, 33.3% of Friedman Industries shares are held by institutional investors. 6.6% of Friedman Industries shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Wheaton Precious Metals 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
Wheaton Precious Metals	$2.31 billion	22.69	$1.47 billion	$3.96	29.20
Friedman Industries	$646.91 million	0.39	$19.53 million	$2.76	12.82

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

Analyst Ratings

This is a summary of recent ratings and target prices for Wheaton Precious Metals and Friedman Industries, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Wheaton Precious Metals	0	1	12	0	2.92
Friedman Industries	0	0	1	0	3.00

Wheaton Precious Metals presently has a consensus price target of $165.55, indicating a potential upside of 43.15%. Given Wheaton Precious Metals’ higher possible upside, research analysts clearly believe Wheaton Precious Metals is more favorable than Friedman Industries.

Dividends

Wheaton Precious Metals pays an annual dividend of $0.78 per share and has a dividend yield of 0.7%. Friedman Industries pays an annual dividend of $0.16 per share and has a dividend yield of 0.5%. Wheaton Precious Metals pays out 19.7% of its earnings in the form of a dividend. Friedman Industries pays out 5.8% 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. Wheaton Precious Metals has raised its dividend for 2 consecutive years and Friedman Industries has raised its dividend for 1 consecutive years. Wheaton Precious Metals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Wheaton Precious Metals beats Friedman Industries on 13 of the 17 factors compared between the two stocks.

About Wheaton Precious Metals

Wheaton Precious Metals Corp. primarily sells precious metals in North America, Europe, and South America. It produces and sells gold, silver, palladium, and cobalt deposits. The company was formerly known as Silver Wheaton Corp. and changed its name to Wheaton Precious Metals Corp. in May 2017. Wheaton Precious Metals Corp. was founded in 2004 and is headquartered in Vancouver, Canada.

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.