L.B. Foster (NASDAQ: FSTR) and Reliance Steel & Aluminum (NYSE:RS) are both basic materials companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.
Risk & Volatility
L.B. Foster has a beta of 2.26, suggesting that its share price is 126% more volatile than the S&P 500. Comparatively, Reliance Steel & Aluminum has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.
72.0% of L.B. Foster shares are owned by institutional investors. Comparatively, 82.7% of Reliance Steel & Aluminum shares are owned by institutional investors. 15.2% of L.B. Foster shares are owned by insiders. Comparatively, 3.7% of Reliance Steel & Aluminum shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This table compares L.B. Foster and Reliance Steel & Aluminum’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Reliance Steel & Aluminum||6.31%||9.00%||5.14%|
Reliance Steel & Aluminum pays an annual dividend of $2.00 per share and has a dividend yield of 2.3%. L.B. Foster does not pay a dividend. Reliance Steel & Aluminum pays out 36.8% of its earnings in the form of a dividend. Reliance Steel & Aluminum has raised its dividend for 7 consecutive years.
This is a breakdown of recent ratings and target prices for L.B. Foster and Reliance Steel & Aluminum, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Reliance Steel & Aluminum||0||3||7||0||2.70|
Reliance Steel & Aluminum has a consensus target price of $90.43, indicating a potential upside of 4.40%. Given Reliance Steel & Aluminum’s higher possible upside, analysts plainly believe Reliance Steel & Aluminum is more favorable than L.B. Foster.
Valuation and Earnings
This table compares L.B. Foster and Reliance Steel & Aluminum’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|L.B. Foster||$536.38 million||0.48||$4.11 million||N/A||N/A|
|Reliance Steel & Aluminum||$9.72 billion||0.65||$613.40 million||$5.44||15.92|
Reliance Steel & Aluminum has higher revenue and earnings than L.B. Foster.
Reliance Steel & Aluminum beats L.B. Foster on 11 of the 15 factors compared between the two stocks.
L.B. Foster Company Profile
L.B. Foster Company manufactures and distributes products and services for the transportation and energy infrastructure worldwide. Its Rail Products and Services segment offers new rail for passenger and shortline freight railroads, industrial companies, and rail contractors; used rail; rail accessories, such as track spikes, bolts, angle bars, and other products; power rail, direct fixation fasteners, coverboards, and special accessories; and trackwork products, as well as engineers and fabricates insulated rail joints and related accessories. This segment also provides friction management products and application systems, railroad condition monitoring equipment, wheel impact load detection products, rail anchors and spikes, wayside data collection and management systems, epoxy and nylon-encapsulated insulated rail joints, and track fasteners; and engineered concrete railroad ties. The company's Construction Products segment sells and rents steel sheet piling, H-bearing pile, and other piling products; manufactures and sells fabricated steel and aluminum products primarily for the highway, bridge, and transit industries; and produces precast concrete buildings, and pre-stressed and precast concrete products. Its Tubular and Energy Services segment provides pipe coatings for natural gas pipelines and utilities; provides solutions for metering and injection systems for the oil and gas market; offers upstream test and inspection services; provides precision measurement systems, and inspection and tubular integrity management services for the oil and gas market; and produces threaded pipe products for the oil and gas, industrial water well, and irrigation markets. In addition, the company offers telecommunications and security systems; and application engineering solutions. It markets its products directly, as well as through a network of agents. L.B. Foster Company was founded in 1902 and is headquartered in Pittsburgh, Pennsylvania.
Reliance Steel & Aluminum Company Profile
Reliance Steel & Aluminum Co. operates as a metals service center company in the United States and internationally. The company provides steel, aluminum, stainless, and specialty metals and related processing services to customers in various industries, such as infrastructure and energy; fabricates steel and aluminum products; and provides various precision fabrication services, including laser cutting, shearing, computer numerated control (CNC) punching, and CNC forming and rolling, as well as welding, assembly, painting, inventory management, and engineering expertise. It also manufactures metal parts that have applications in various end markets, including industrial machinery, automotive, aerospace, sugar products, and consumer electronics manufacturers. In addition, it distributes and processes carbon, alloy and stainless steel pipe, tubing, and bar products. The company sells directly to large original equipment manufacturer customers, as well as to small machine shops and fabricators. Reliance Steel & Aluminum Co. was founded in 1939 and is headquartered in Los Angeles, California.
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