Northwest Pipe (NASDAQ: NWPX) and Dynamic Materials Corp. (NASDAQ:BOOM) are both small-cap industrial products companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Profitability

This table compares Northwest Pipe and Dynamic Materials Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Northwest Pipe -1.59% -3.03% -2.67%
Dynamic Materials Corp. -10.69% -1.20% -0.81%

Analyst Ratings

This is a summary of current ratings and recommmendations for Northwest Pipe and Dynamic Materials Corp., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Northwest Pipe 0 1 0 0 2.00
Dynamic Materials Corp. 0 0 1 0 3.00

Northwest Pipe currently has a consensus price target of $9.00, indicating a potential downside of 47.83%. Dynamic Materials Corp. has a consensus price target of $22.00, indicating a potential upside of 3.77%. Given Dynamic Materials Corp.’s stronger consensus rating and higher possible upside, analysts plainly believe Dynamic Materials Corp. is more favorable than Northwest Pipe.

Dividends

Dynamic Materials Corp. pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Northwest Pipe does not pay a dividend. Dynamic Materials Corp. pays out -6.0% of its earnings in the form of a dividend.

Risk and Volatility

Northwest Pipe has a beta of 1.26, indicating that its share price is 26% more volatile than the S&P 500. Comparatively, Dynamic Materials Corp. has a beta of 1, indicating that its share price has a similar volatility profile to the S&P 500.

Earnings & Valuation

This table compares Northwest Pipe and Dynamic Materials Corp.’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Northwest Pipe $156.26 million 1.06 -$9.26 million ($0.23) -75.00
Dynamic Materials Corp. $158.57 million 1.97 -$6.50 million ($1.33) -15.94

Dynamic Materials Corp. has higher revenue and earnings than Northwest Pipe. Northwest Pipe is trading at a lower price-to-earnings ratio than Dynamic Materials Corp., indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

84.1% of Northwest Pipe shares are owned by institutional investors. Comparatively, 86.1% of Dynamic Materials Corp. shares are owned by institutional investors. 2.0% of Northwest Pipe shares are owned by insiders. Comparatively, 5.1% of Dynamic Materials Corp. shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Dynamic Materials Corp. beats Northwest Pipe on 12 of the 15 factors compared between the two stocks.

About Northwest Pipe

Northwest Pipe Company is a manufacturer of engineered steel pipe water systems. The Company operates through two segments. The Water Transmission segment produces steel pipeline systems for use in drinking water infrastructure, and has approximately eight manufacturing facilities, located in Portland, Oregon; Denver, Colorado; Adelanto, California; Parkersburg, West Virginia; Saginaw, Texas; St. Louis, Missouri; Salt Lake City, Utah, and Monterrey, Mexico. The Tubular Products segment produces steel line pipe products for energy applications, and has a manufacturing facility located in Atchison, Kansas. The Company, through Water Transmission Group, produces engineered welded steel pipe products for use in water transmission applications. It also manufactures smaller diameter electric resistance welded (ERW) steel pipe through its Tubular Products Group. The Company’s solutions-based products are used in water transmission, plant piping, tunnels and river crossings applications.

About Dynamic Materials Corp.

DMC Global Inc., formerly Dynamic Materials Corporation, is a diversified technology company. The Company operates a family of technical product and process businesses serving the energy, industrial and infrastructure markets. The Company’s businesses operate through an international network of manufacturing, distribution and sales facilities. The Company’s segments are NobelClad and DynaEnergetics. The NobelClad segment is engaged in the production of explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment and specialized transition joints. The DynaEnergetics segment manufactures, markets and sells oilfield perforating equipment and explosives, including detonating cords, detonators, bi-directional boosters and shaped charges, and seismic related explosives and accessories. It owns explosive metalworking and metallic processes, and registered trademarks, including Detaclad, Detacouple, EFTEK, ETJ 2000 and NOBELCLAD.

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