L.B. Foster (NASDAQ: FSTR) and Synalloy Corporation (NASDAQ:SYNL) are both small-cap basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Institutional & Insider Ownership

71.1% of L.B. Foster shares are held by institutional investors. Comparatively, 47.6% of Synalloy Corporation shares are held by institutional investors. 15.2% of L.B. Foster shares are held by company insiders. Comparatively, 10.6% of Synalloy Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares L.B. Foster and Synalloy Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
L.B. Foster $484.77 million 0.49 $23.17 million ($4.49) -5.07
Synalloy Corporation $161.06 million 0.68 $7.35 million ($0.29) -43.10

L.B. Foster has higher revenue and earnings than Synalloy Corporation. Synalloy Corporation is trading at a lower price-to-earnings ratio than L.B. Foster, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for L.B. Foster and Synalloy Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
L.B. Foster 0 0 0 0 N/A
Synalloy Corporation 0 0 0 0 N/A

Volatility & Risk

L.B. Foster has a beta of 2.21, suggesting that its stock price is 121% more volatile than the S&P 500. Comparatively, Synalloy Corporation has a beta of 0.14, suggesting that its stock price is 86% less volatile than the S&P 500.

Profitability

This table compares L.B. Foster and Synalloy Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
L.B. Foster -9.83% -27.82% -10.07%
Synalloy Corporation -1.54% 0.64% 0.38%

About L.B. Foster

L.B. Foster Company is a manufacturer, fabricator and distributor of products and services for the rail, construction, energy and utility markets. The Company’s segments include Rail Products and Services, Construction Products, and Tubular and Energy Services. Its Rail Products segment provides a range of new and used rail, trackwork and accessories to railroads, mines and industry. The Rail segment designs and produces concrete railroad ties, insulated rail joints, power rail, track fasteners, coverboards and special accessories for mass transit and other rail systems. The Construction Products segment sells and rents steel sheet piling, H-bearing pile and other piling products for foundation and earth retention requirements. The Tubular and Energy Services segment supplies pipe coatings for natural gas pipelines and utilities, blending, injection and metering equipment for the oil and gas market, and produces threaded pipe products for industrial water well and irrigation markets.

About Synalloy Corporation

Synalloy Corporation is a chemical manufacturing company. The Company operates through two segments: the Metals Segment and the Specialty Chemicals Segment. The Company’s Metals Segment comprises three subsidiaries: Synalloy Metals, Inc., which owns Bristol Metals, LLC (BRISMET), located in Bristol, Tennessee; Palmer of Texas Tanks, Inc. (Palmer), located in Andrews, Texas; and Specialty Pipe & Tube, Inc. (Specialty), located in Mineral Ridge, Ohio and Houston, Texas. The Company’s Metals Segment manufactures stainless steel, other alloy pipe, storage solutions and separation equipment. The Company’s Specialty Chemicals segment consists of the Company’s subsidiary, Manufacturers Soap and Chemical Company (MS&C). The Specialty Chemicals Segment manufactures lubricants, surfactants, reaction intermediaries, sulfated fats and oils, and chemical tolling manufacturing resources.

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