Caesarstone (NASDAQ:CSTE – Get Free Report) and Latham Group (NASDAQ:SWIM – Get Free Report) are both small-cap construction companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, earnings, valuation, institutional ownership, profitability and analyst recommendations.
Profitability
This table compares Caesarstone and Latham Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Caesarstone | -18.44% | -19.35% | -9.18% |
| Latham Group | -2.07% | -2.80% | -1.34% |
Insider & Institutional Ownership
33.7% of Caesarstone shares are owned by institutional investors. Comparatively, 84.0% of Latham Group shares are owned by institutional investors. 6.9% of Latham Group shares are owned by company 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.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Caesarstone | $443.22 million | 0.16 | -$42.83 million | ($2.03) | -1.03 |
| Latham Group | $508.52 million | 1.54 | -$17.86 million | ($0.10) | -67.00 |
Latham Group has higher revenue and earnings than Caesarstone. Latham Group is trading at a lower price-to-earnings ratio than Caesarstone, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Caesarstone and Latham Group, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Caesarstone | 1 | 0 | 0 | 0 | 1.00 |
| Latham Group | 2 | 1 | 0 | 0 | 1.33 |
Latham Group has a consensus price target of $7.44, indicating a potential upside of 11.01%. Given Latham Group’s stronger consensus rating and higher probable upside, analysts plainly believe Latham Group is more favorable than Caesarstone.
Risk & Volatility
Caesarstone has a beta of -0.09, suggesting that its stock price is 109% less volatile than the S&P 500. Comparatively, Latham Group has a beta of 1.72, suggesting that its stock price is 72% more volatile than the S&P 500.
Summary
Latham Group beats Caesarstone on 12 of the 13 factors compared between the two stocks.
About Caesarstone
Caesarstone Ltd., together with its subsidiaries, designs, develops, manufactures, and markets engineered stone and other materials under the Caesarstone brand in the United States, Canada, Latin America, Australia, Asia, Europe, the Middle East and Africa, and Israel. The company’s engineered stone slabs are primarily used as indoor and outdoor kitchen countertops in the renovation and remodeling, and residential construction sectors. Its products are also used in other applications, such as vanity tops, wall panels, back splashes, floor tiles, stairs, furniture, and other interior and exterior surfaces that are used in various residential and non-residential applications. The company also offers porcelain products under the Lioli brand for countertops, flooring, and cladding applications; sells natural stone, sinks, and various ancillary fabrication tools and materials; and resells natural stones, as well as various ancillaries, and fabrication and installation accessories, as well as provides fabrication and installation services. It sells its products directly to wholesalers, resellers, and fabricators; and through direct sales force and indirect network of independent distributors. The company was formerly known as Caesarstone Sdot Yam Ltd. and changed its name to Caesarstone Ltd. in June 2016. Caesarstone Ltd. was founded in 1987 and is headquartered in Menashe, Israel.
About Latham Group
Latham Group, Inc. designs, manufactures, and markets in-ground residential swimming pools in North America, Australia, and New Zealand. It offers a portfolio of pools and related products, including in-ground swimming pools that include fiber glass and packaged pools; and pool covers and liners under the Latham, Narellan, CoverStar, Radiant, and GLI brand names. The company was formerly known as Latham Topco, Inc. and changed its name to Latham Group, Inc. in March 2021. Latham Group, Inc. was founded in 1956 and is headquartered in Latham, New York.
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