Reviewing Owens Corning (NYSE:OC) and Caesarstone (NASDAQ:CSTE)

Owens Corning (NYSE:OC) and Caesarstone (NASDAQ:CSTE) are both construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Profitability

This table compares Owens Corning and Caesarstone’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Owens Corning	-5.17%	21.93%	7.33%
Caesarstone	-18.44%	-19.35%	-9.18%

Volatility & Risk

Owens Corning has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500. Comparatively, Caesarstone has a beta of -0.03, suggesting that its share price is 103% less volatile than the S&P 500.

Insider and Institutional Ownership

88.4% of Owens Corning shares are held by institutional investors. Comparatively, 33.7% of Caesarstone shares are held by institutional investors. 0.8% of Owens Corning shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for Owens Corning and Caesarstone, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Owens Corning	1	6	10	1	2.61
Caesarstone	1	0	0	0	1.00

Owens Corning currently has a consensus target price of $151.58, indicating a potential upside of 28.66%. Given Owens Corning’s stronger consensus rating and higher probable upside, research analysts plainly believe Owens Corning is more favorable than Caesarstone.

Earnings & Valuation

This table compares Owens Corning and Caesarstone”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Owens Corning	$10.10 billion	0.94	-$522.00 million	($6.40)	-18.41
Caesarstone	$443.22 million	0.11	-$42.83 million	($2.03)	-0.67

Caesarstone has lower revenue, but higher earnings than Owens Corning. Owens Corning is trading at a lower price-to-earnings ratio than Caesarstone, indicating that it is currently the more affordable of the two stocks.

Summary

Owens Corning beats Caesarstone on 12 of the 15 factors compared between the two stocks.

About Owens Corning

Owens Corning manufactures and sells building and construction materials in the United States, Europe, the Asia Pacific, and internationally. It operates in three segments: Roofing, Insulation, and Composites. The Roofing segment manufactures and sells laminate and strip asphalt roofing shingles, oxidized asphalt materials, and roofing components used in residential and commercial construction, and specialty applications. This segment sells its products through distributors, home centers, and lumberyards, as well as to roofing contractors for built-up roofing asphalt systems; and manufacturers in automotive, chemical, rubber, and construction industries. The Insulation segment manufactures and sells thermal and acoustical batts, loosefill insulation, spray foam insulation, foam sheathing and accessories under the Owens Corning PINK, and FIBERGLAS brands; and glass fiber pipe insulation, energy efficient flexible duct media, bonded and granulated mineral wool insulation, cellular glass insulation, and foam insulation under the FOAMULAR, FOAMGLAS, and Paroc brand names used in construction applications. This segment sells its products primarily to the insulation installers, home centers, lumberyards, retailers, and distributors. The Composites segment manufactures, fabricates, and sells glass reinforcements in the form of fiber; and glass fiber products in the form of fabrics, non-wovens, and composite lumber. Its products are used in building structures, roofing shingles, tubs and showers, pools, decking, flooring, pipes and tanks, poles, electrical equipment, and wind-energy turbine blades. This segment sells its products directly to parts molders, fabricators, and shingle manufacturers. The company was incorporated in 1938 and is headquartered in Toledo, Ohio.

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.