Trex (NYSE: TREX) and Continental Building Products (NYSE:CBPX) are both construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, valuation, institutional ownership, earnings and dividends.
Earnings and Valuation
This table compares Trex and Continental Building Products’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Trex||$504.24 million||4.83||$131.61 million||$2.58||32.09|
|Continental Building Products||$474.02 million||2.06||$131.29 million||$1.09||23.30|
Trex has higher revenue and earnings than Continental Building Products. Continental Building Products is trading at a lower price-to-earnings ratio than Trex, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings for Trex and Continental Building Products, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Continental Building Products||0||2||1||0||2.33|
Trex presently has a consensus price target of $71.75, indicating a potential downside of 13.33%. Continental Building Products has a consensus price target of $26.50, indicating a potential upside of 4.33%. Given Continental Building Products’ higher probable upside, analysts clearly believe Continental Building Products is more favorable than Trex.
Insider & Institutional Ownership
91.8% of Trex shares are held by institutional investors. 1.0% of Trex shares are held by insiders. Comparatively, 0.3% of Continental Building Products shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Volatility & Risk
Trex has a beta of 2.32, indicating that its stock price is 132% more volatile than the S&P 500. Comparatively, Continental Building Products has a beta of 1.26, indicating that its stock price is 26% more volatile than the S&P 500.
This table compares Trex and Continental Building Products’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Continental Building Products||9.16%||15.45%||7.55%|
Trex beats Continental Building Products on 13 of the 14 factors compared between the two stocks.
Trex Company, Inc. is a manufacturer of wood-alternative decking and railing products. The Company’s products are marketed under the brand name Trex and are manufactured in the United States. It offers a set of outdoor living products in the decking, railing, porch, fencing, trim, steel deck framing and outdoor lighting categories. Its decking products include Trex Transcend, Trex Enhance and Trex Select. The Company’s railing products include Trex Transcend Railing, Trex Select Railing and Trex Signature aluminum railing. It offers Trex Transcend Porch Flooring and Railing System, which is an integrated system of porch components and accessories. The Company offers Trex Seclusions fencing product, which consists of structural posts, bottom rail, pickets, top rail and decorative post caps. It offers a triple-coated steel deck framing system called Trex Elevations. The Company also offers outdoor lighting systems, such as Trex DeckLighting and Trex Landscape Lighting.
About Continental Building Products
Continental Building Products, Inc. is a manufacturer of gypsum wallboard and complementary finishing products. The Company operates through wallboard segment. Gypsum wallboard is a primary building material used in residential and commercial construction and in repair and remodel (R&R). It offers customers a range of gypsum wallboard products, including LiftLite, its lightweight product designed to lift and install; its Mold Defense line of products designed for protection against mold and mildew, and its Weather Defense line of moisture and mold-resistant exterior sheathing. The Company also operates a finishing products business that manufactures a line of joint compounds at its plant in Silver Grove (Kentucky) and its joint compound plant in Chambly (Quebec). The Company manufactures gypsum wallboard related products for commercial and residential buildings and houses. The Company’s manufacturing facilities are concentrated in the eastern United States and eastern Canada.
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