Simpson Manufacturing (NYSE: SSD) and Fortune Brands Home & Security (NYSE:FBHS) are both mid-cap construction companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, dividends, analyst recommendations, profitability, risk, institutional ownership and valuation.
Insider & Institutional Ownership
83.6% of Simpson Manufacturing shares are owned by institutional investors. Comparatively, 88.1% of Fortune Brands Home & Security shares are owned by institutional investors. 0.4% of Simpson Manufacturing shares are owned by insiders. Comparatively, 1.6% of Fortune Brands Home & Security 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 is a breakdown of current ratings and recommmendations for Simpson Manufacturing and Fortune Brands Home & Security, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fortune Brands Home & Security||0||6||8||0||2.57|
Fortune Brands Home & Security has a consensus target price of $68.00, indicating a potential upside of 3.03%. Given Fortune Brands Home & Security’s higher probable upside, analysts plainly believe Fortune Brands Home & Security is more favorable than Simpson Manufacturing.
This table compares Simpson Manufacturing and Fortune Brands Home & Security’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fortune Brands Home & Security||8.61%||18.93%||8.88%|
Risk and Volatility
Simpson Manufacturing has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500. Comparatively, Fortune Brands Home & Security has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500.
Valuation and Earnings
This table compares Simpson Manufacturing and Fortune Brands Home & Security’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Simpson Manufacturing||$914.03 million||2.56||$171.24 million||$2.05||24.15|
|Fortune Brands Home & Security||$5.13 billion||1.98||$822.40 million||$2.84||23.24|
Fortune Brands Home & Security has higher revenue and earnings than Simpson Manufacturing. Fortune Brands Home & Security is trading at a lower price-to-earnings ratio than Simpson Manufacturing, indicating that it is currently the more affordable of the two stocks.
Simpson Manufacturing pays an annual dividend of $0.84 per share and has a dividend yield of 1.7%. Fortune Brands Home & Security pays an annual dividend of $0.72 per share and has a dividend yield of 1.1%. Simpson Manufacturing pays out 41.0% of its earnings in the form of a dividend. Fortune Brands Home & Security pays out 25.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Simpson Manufacturing has raised its dividend for 3 consecutive years and Fortune Brands Home & Security has raised its dividend for 3 consecutive years.
Fortune Brands Home & Security beats Simpson Manufacturing on 9 of the 15 factors compared between the two stocks.
Simpson Manufacturing Company Profile
Simpson Manufacturing Co., Inc., through its subsidiary, Simpson Strong-Tie Company Inc. (SST), designs, engineers and manufactures wood construction products, including connectors, truss plates, fastening systems, fasteners and pre-fabricated lateral systems used in light-frame construction. The Company’s segments are North America, Europe, Asia/Pacific, and Administrative & All Other. The North America segment includes operations primarily in the United States and Canada. The Europe segment includes operations primarily in France, the United Kingdom, Germany, Denmark, Switzerland, Portugal, Poland, the Netherlands and Belgium. The Asia/Pacific segment includes operations primarily in Australia, New Zealand, South Africa, China, Taiwan and Vietnam. The Company manufactures concrete construction products used for concrete, masonry, steel construction and for concrete repair, protection and strengthening, including adhesives, chemicals and mechanical anchors.
Fortune Brands Home & Security Company Profile
Fortune Brands Home & Security, Inc. is a holding company. The Company operates through four segments. The Cabinets segment includes custom, semi-custom and stock cabinetry for the kitchen, bath and other parts of the home under brand names, including Aristokraft, Mid-Continent, Diamond, Kitchen Classics, Kitchen Craft, Schrock, Omega, Homecrest, Thomasville, StarMark and Ultracraft. The Plumbing segment manufactures or assembles and sells faucets, bath furnishings, accessories and kitchen sinks and waste disposals under the Moen, Riobel, ROHL, Perrin & Rowe, and Waste King brands. The Doors segment includes residential fiberglass and steel entry door systems under the Therma-Tru brand name and urethane millwork product lines under the Fypon brand name. The Security segment includes locks, safety and security devices and electronic security products under the Master Lock brand name and fire resistant safes, security containers and commercial cabinets under the SentrySafe brand name.
Receive News & Ratings for Simpson Manufacturing Company Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Simpson Manufacturing Company Inc. and related companies with MarketBeat.com's FREE daily email newsletter.