Advanced Drainage Systems (NYSE: WMS) and China XD Plastics (NASDAQ:CXDC) are both small-cap construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.
Volatility and Risk
Advanced Drainage Systems has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, China XD Plastics has a beta of 2.38, indicating that its stock price is 138% more volatile than the S&P 500.
Insider and Institutional Ownership
79.5% of Advanced Drainage Systems shares are held by institutional investors. Comparatively, 11.2% of China XD Plastics shares are held by institutional investors. 21.4% of Advanced Drainage Systems shares are held by insiders. Comparatively, 66.4% of China XD Plastics shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Advanced Drainage Systems pays an annual dividend of $0.28 per share and has a dividend yield of 1.1%. China XD Plastics does not pay a dividend. Advanced Drainage Systems pays out 56.0% of its earnings in the form of a dividend. Advanced Drainage Systems has raised its dividend for 2 consecutive years.
This is a breakdown of current recommendations for Advanced Drainage Systems and China XD Plastics, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Advanced Drainage Systems||0||4||1||0||2.20|
|China XD Plastics||0||0||0||0||N/A|
Advanced Drainage Systems presently has a consensus target price of $26.25, indicating a potential upside of 2.34%. Given Advanced Drainage Systems’ higher probable upside, equities research analysts plainly believe Advanced Drainage Systems is more favorable than China XD Plastics.
This table compares Advanced Drainage Systems and China XD Plastics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Advanced Drainage Systems||3.67%||45.42%||3.58%|
|China XD Plastics||2.45%||16.08%||4.80%|
Valuation and Earnings
This table compares Advanced Drainage Systems and China XD Plastics’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Advanced Drainage Systems||$1.26 billion||1.15||$32.95 million||$0.50||51.30|
|China XD Plastics||$1.29 billion||0.16||$31.62 million||N/A||N/A|
Advanced Drainage Systems has higher earnings, but lower revenue than China XD Plastics.
Advanced Drainage Systems beats China XD Plastics on 10 of the 15 factors compared between the two stocks.
Advanced Drainage Systems Company Profile
Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products for non-residential, residential, agriculture, and infrastructure applications in the United States and internationally. The company provides single, double, and triple wall corrugated polypropylene and polyethylene pipes; and allied products comprising storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators. It also purchases and distributes construction fabrics, as well as other geosynthetic products for soil stabilization, reinforcement, filtration, separation, erosion control, and sub-surface drainage. The company was founded in 1966 and is headquartered in Hilliard, Ohio.
China XD Plastics Company Profile
China XD Plastics Company Limited, together with its subsidiaries, engages in the research, development, manufacture, and sale of plastics primarily for automotive applications in China and Dubai, the United Arab Emirates. Its plastics are used to fabricate various auto components, including exteriors consisting of automobile bumpers, rearview and sideview mirrors, and license plate parts; interiors, such as door panels, dashboards, steering wheels, glove compartments, and safety belt components; and functional components comprising air conditioner casings, heating and ventilation casings, engine covers, and air ducts. The company also offers engineered plastics and environment-friendly plastics for use in oilfield equipment, mining equipment, vessel propulsion systems, and power station equipment. China XD Plastics Company Limited primarily sells its products to end customers through distributors, as well as directly. The company was founded in 1999 and is based in Harbin, the People's Republic of China.
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