Omega Flex, Inc. (OFLX) stock analysis

P/E below its 5-year median

Omega Flex's P/E of 22.7 is below its own 5-year median of 31.9.

P/E above the industry

Omega Flex's P/E of 22.7 is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 22.3.

EV/EBITDA below its 5-year median

Omega Flex's EV/EBITDA of 14.8 is below its 5-year median of 23.2.

P/B above the industry

Omega Flex's price-to-book of 2.97 is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 2.80.

Trading below fair value

The share price of $23.84 is below our fair value estimate of $28.82.

Margin of safety under 20%

The price is 17.3% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -7.8% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -14.4% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -34.6% over the last twelve months, against a 5-year average of -5.7% a year.

Growing slower than the industry

Revenue grew -2.0% over the last twelve months; the Fabricated Metal Products, except Machinery and Transportation Equipment median is 10.2%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin slipping

Gross margin was 55.6% over the last twelve months, against 60.6% a year earlier.

Return on equity under 15%

Return on equity was 12.7% over the last twelve months and averaged 30.6% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 24.4%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Omega Flex's return on equity of 12.7% is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 9.0%.

Earnings shrank over 5 years

Net income shrank 5.7% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 10.7% over the last twelve months, against a 5-year average of 18.1%.

Net margin above the industry

Omega Flex's net margin of 10.7% is above the Fabricated Metal Products, except Machinery and Transportation Equipment median of 4.5%.

No debt

Omega Flex has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 5.36 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 10.55; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Omega Flex paid dividends worth 5.7% of the share price over the last twelve months.

Yield above Treasuries

The 5.7% yield is above the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; Omega Flex yields 5.7%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Not covered by earnings

Dividends take 130% of net income, leaving little room.

Not covered by free cash flow

Dividends take 194% of free cash flow.