Foundation Building Materials (NYSE: FBM) and Beacon Roofing Supply (NASDAQ:BECN) are both construction companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.
Insider & Institutional Ownership
94.2% of Foundation Building Materials shares are held by institutional investors. 0.5% of Foundation Building Materials shares are held by insiders. Comparatively, 0.8% of Beacon Roofing Supply shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares Foundation Building Materials and Beacon Roofing Supply’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Foundation Building Materials||4.00%||2.44%||0.58%|
|Beacon Roofing Supply||3.29%||9.60%||4.21%|
Earnings and Valuation
This table compares Foundation Building Materials and Beacon Roofing Supply’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Foundation Building Materials||$2.06 billion||0.30||$82.48 million||$0.30||48.70|
|Beacon Roofing Supply||$4.38 billion||0.81||$100.86 million||$2.18||23.85|
Beacon Roofing Supply has higher revenue and earnings than Foundation Building Materials. Beacon Roofing Supply is trading at a lower price-to-earnings ratio than Foundation Building Materials, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Foundation Building Materials has a beta of 0.27, indicating that its share price is 73% less volatile than the S&P 500. Comparatively, Beacon Roofing Supply has a beta of 1.38, indicating that its share price is 38% more volatile than the S&P 500.
This is a breakdown of current ratings and price targets for Foundation Building Materials and Beacon Roofing Supply, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Foundation Building Materials||0||1||4||2||3.14|
|Beacon Roofing Supply||0||2||7||0||2.78|
Foundation Building Materials currently has a consensus price target of $17.83, suggesting a potential upside of 22.06%. Beacon Roofing Supply has a consensus price target of $61.11, suggesting a potential upside of 17.54%. Given Foundation Building Materials’ stronger consensus rating and higher possible upside, research analysts plainly believe Foundation Building Materials is more favorable than Beacon Roofing Supply.
Beacon Roofing Supply beats Foundation Building Materials on 9 of the 15 factors compared between the two stocks.
About Foundation Building Materials
Foundation Building Materials, Inc. is a specialty distributor of wallboard and suspended ceiling systems in the United States and Canada. The Company’s segments include Specialty Building Products and Mechanical Insulation. The Company fabricates and distributes its products for specialty contractors seeking to improve or maintain energy efficiency in a range of commercial and industrial buildings. It serves markets across the United States and in Canada. Specialty building products segment distributes wallboard and accessories, metal framing, suspended ceiling systems and other products. Other products include stucco and Exterior insulation and finish system (EIFS), as well as offerings, such as tools, safety accessories and fasteners. Its Mechanical insulation segment includes insulation solutions for pipes and mechanical systems and the primary end markets served are new non-residential construction, non- residential repair and remodel construction and industrial markets.
About Beacon Roofing Supply
Beacon Roofing Supply, Inc., together with its subsidiaries, distributes residential and commercial roofing materials, and other complementary building materials to contractors, home builders, retailers, and building materials suppliers. The company's residential roofing products include asphalt shingles, synthetic slates and tiles, clay and concrete tiles, slates, nail base insulations, metal roofing, felts, synthetic underlayment, wood shingles and shakes, nails and fasteners, metal edgings and flashings, prefabricated flashings, ridges and soffit vents, and other accessories. Its non-residential roofing products comprise single-ply roofing, asphalt, metal, modified bitumen, and build-up roofing products; cements and coatings; flat stock and tapered insulations; commercial fasteners; metal edges and flashings; smoke/roof hatches; roofing tools; sheet metal products, including copper, aluminum, and steel; and PVC, thermoplastic olefin, and ethylene propylene diene monomer membrane products. The company also provides complementary building products, such as vinyl, wood, and fiber cement sidings; and stone veneers, windows, doors, skylights, and gutters and downspouts, as well as decking and railing, sealants, air barriers, water proofing, building insulation, concrete restoration systems, and millwork products. In addition, it offers value-added services, including advice and assistance on product identification, specification, and technical support; job site delivery, rooftop loading, and logistical services; tapered insulation design and related layout services; metal fabrication and related metal roofing design and layout services; trade credit; and marketing support for contractors. As of November 20, 2017, the company operated through a network of 383 branches in 48 states of the United States and 6 provinces in Canada. Beacon Roofing Supply, Inc. was founded in 1928 and is headquartered in Herndon, Virginia.
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