Quanex Building Products Corporation (NYSE: NX) and Installed Building Products (NYSE:IBP) are both small-cap construction companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, earnings, institutional ownership and risk.
Institutional and Insider Ownership
99.5% of Quanex Building Products Corporation shares are owned by institutional investors. Comparatively, 63.6% of Installed Building Products shares are owned by institutional investors. 5.3% of Quanex Building Products Corporation shares are owned by company insiders. Comparatively, 32.9% of Installed Building Products shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Volatility & Risk
Quanex Building Products Corporation has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Installed Building Products has a beta of 0.81, indicating that its share price is 19% less volatile than the S&P 500.
This is a breakdown of recent ratings for Quanex Building Products Corporation and Installed Building Products, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Quanex Building Products Corporation||0||0||3||0||3.00|
|Installed Building Products||0||0||3||0||3.00|
Quanex Building Products Corporation presently has a consensus target price of $23.75, indicating a potential upside of 23.38%. Installed Building Products has a consensus target price of $63.67, indicating a potential upside of 12.78%. Given Quanex Building Products Corporation’s higher possible upside, analysts clearly believe Quanex Building Products Corporation is more favorable than Installed Building Products.
Earnings and Valuation
This table compares Quanex Building Products Corporation and Installed Building Products’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Quanex Building Products Corporation||$901.48 million||0.73||$98.42 million||($0.03)||-641.45|
|Installed Building Products||$997.23 million||1.80||$121.83 million||$1.30||43.42|
Installed Building Products has higher revenue and earnings than Quanex Building Products Corporation. Quanex Building Products Corporation is trading at a lower price-to-earnings ratio than Installed Building Products, indicating that it is currently the more affordable of the two stocks.
Quanex Building Products Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.8%. Installed Building Products does not pay a dividend. Quanex Building Products Corporation pays out -533.2% of its earnings in the form of a dividend.
This table compares Quanex Building Products Corporation and Installed Building Products’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Quanex Building Products Corporation||-0.09%||7.70%||3.64%|
|Installed Building Products||4.11%||25.27%||7.46%|
Installed Building Products beats Quanex Building Products Corporation on 9 of the 13 factors compared between the two stocks.
About Quanex Building Products Corporation
Quanex Building Products Corporation manufactures components for original equipment manufacturers (OEM) in the building products industry. The Company’s components can be categorized as window and door (fenestration) components, and kitchen and bath cabinet components. The Company operates through three segments: North American Engineered Components (NA Engineered Components), which consists of four operating segments primarily focused on the fenestration market in North America manufacturing vinyl profiles, insulating glass (IG) spacers, screens and other fenestration components; European Engineered Components (EU Engineered Components), which consists of the United Kingdom-based vinyl extrusion business, manufacturing vinyl profiles and conservatories, and the European insulating glass business manufacturing IG spacers, and North American Cabinet Components (NA Cabinet Components), which consists of the North American cabinet door and components business.
About Installed Building Products
Installed Building Products, Inc. is a holding company. The Company is a residential insulation installer in the United States. As of December 31, 2016, the Company’s national platform included over 100 locations accessing customers in 48 continental states and the District of Columbia. The Company also installs complementary building products, including garage doors, rain gutters, shower doors, closet shelving and mirrors, which provides cross-selling opportunities to supplement the insulation installation business. The Company manages various aspects of the installation process for the customers, from the direct purchase and receipt of materials from national manufacturers, to supply of materials to job sites and quality installation. The Company’s customers include production and custom homebuilders, multi-family and commercial contractors, and homeowners.
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