Analyzing Douglas Dynamics (NYSE:PLOW) and Omega Flex (NASDAQ:OFLX)

Omega Flex (NASDAQ:OFLX) and Douglas Dynamics (NYSE:PLOW) are both small-cap industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Insider and Institutional Ownership

36.1% of Omega Flex shares are held by institutional investors. Comparatively, 91.8% of Douglas Dynamics shares are held by institutional investors. 65.2% of Omega Flex shares are held by insiders. Comparatively, 1.5% of Douglas Dynamics shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Omega Flex and Douglas Dynamics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Omega Flex	1	0	0	0	1.00
Douglas Dynamics	0	2	2	1	2.80

Douglas Dynamics has a consensus target price of $51.67, indicating a potential upside of 22.55%. Given Douglas Dynamics’ stronger consensus rating and higher possible upside, analysts plainly believe Douglas Dynamics is more favorable than Omega Flex.

Dividends

Omega Flex pays an annual dividend of $1.36 per share and has a dividend yield of 5.1%. Douglas Dynamics pays an annual dividend of $1.18 per share and has a dividend yield of 2.8%. Omega Flex pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Douglas Dynamics pays out 53.6% of its earnings in the form of a dividend. Omega Flex has increased its dividend for 7 consecutive years. Omega Flex is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

Omega Flex has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500. Comparatively, Douglas Dynamics has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500.

Earnings & Valuation

This table compares Omega Flex and Douglas Dynamics”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Omega Flex	$98.30 million	2.76	$14.83 million	$1.19	22.61
Douglas Dynamics	$656.05 million	1.48	$46.90 million	$2.20	19.16

Douglas Dynamics has higher revenue and earnings than Omega Flex. Douglas Dynamics is trading at a lower price-to-earnings ratio than Omega Flex, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Omega Flex and Douglas Dynamics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Omega Flex	12.27%	14.26%	11.54%
Douglas Dynamics	7.52%	19.03%	8.07%

Summary

Douglas Dynamics beats Omega Flex on 11 of the 18 factors compared between the two stocks.

About Omega Flex

Omega Flex, Inc., together with its subsidiaries, manufactures and sells flexible metal hoses and accessories in North America and internationally. It offers flexible gas piping for use in residential and commercial buildings; fittings; containment pining; and corrugated medical tubing for use in hospitals, ambulatory care centers, dental, physician and veterinary clinics, laboratories, and other facilities. The company sells its products under the TracPipe, CounterStrike, AutoSnap, AutoFlare, DoubleTrac, DEF-Trac, and MediTrac brand names. It serves various markets, including construction, manufacturing, transportation, petrochemical, pharmaceutical, and other industries. The company sells its products through independent sales representatives, distributors, fabricating distributors, wholesalers, original equipment manufacturers, and direct sales, as well as through its website. The company was formerly known as Tofle America, Inc. and changed its name to Omega Flex, Inc. in 1996. Omega Flex, Inc. was incorporated in 1975 and is based in Exton, Pennsylvania.

About Douglas Dynamics

Douglas Dynamics, Inc. operates as a manufacturer and upfitter of commercial work truck attachments and equipment in North America. It operates through two segments, Work Truck Attachments and Work Truck Solutions. The Work Truck Attachments segment manufactures and sells snow and ice control attachments, including snowplows, and sand and salt spreaders for light trucks and heavy duty trucks, as well as various related parts and accessories. The Work Truck Solutions segment primarily manufactures municipal snow and ice control products; provides truck and vehicle upfits where it attaches component pieces of equipment, truck bodies, racking, and storage solutions to a vehicle chassis for use by end users for work related purposes; and manufactures storage solutions for trucks and vans, and cable pulling equipment for trucks. This segment also offers up-fit and storage solutions. It also provides customized turnkey solutions to governmental agencies, such as Departments of Transportation and municipalities. The company sells its products under the FISHER, SNOWEX, WESTERN, TURFEX, SWEEPEX, HENDERSON, BRINEXTREME, and DEJANA brands. It distributes its products primarily to professional snowplowers who are contracted to remove snow and ice from commercial and residential areas. The company was founded in 1948 and is headquartered in Milwaukee, Wisconsin.