Financial Analysis: Armstrong World Industries (NYSE:AWI) & Modine Manufacturing (NYSE:MOD)

Modine Manufacturing (NYSE:MOD) and Armstrong World Industries (NYSE:AWI) are both mid-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Modine Manufacturing and Armstrong World Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Modine Manufacturing	0	2	7	1	2.90
Armstrong World Industries	0	3	5	1	2.78

Modine Manufacturing presently has a consensus price target of $309.50, indicating a potential upside of 70.23%. Armstrong World Industries has a consensus price target of $213.25, indicating a potential upside of 31.54%. Given Modine Manufacturing’s stronger consensus rating and higher probable upside, analysts plainly believe Modine Manufacturing is more favorable than Armstrong World Industries.

Profitability

This table compares Modine Manufacturing and Armstrong World Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Modine Manufacturing	4.28%	25.59%	11.39%
Armstrong World Industries	18.60%	37.35%	17.06%

Valuation & Earnings

This table compares Modine Manufacturing and Armstrong World Industries”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Modine Manufacturing	$3.18 billion	3.04	$121.50 million	$2.66	68.35
Armstrong World Industries	$1.62 billion	4.23	$308.70 million	$7.30	22.21

Armstrong World Industries has lower revenue, but higher earnings than Modine Manufacturing. Armstrong World Industries is trading at a lower price-to-earnings ratio than Modine Manufacturing, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Modine Manufacturing has a beta of 1.71, suggesting that its share price is 71% more volatile than the S&P 500. Comparatively, Armstrong World Industries has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500.

Institutional and Insider Ownership

95.2% of Modine Manufacturing shares are owned by institutional investors. Comparatively, 98.9% of Armstrong World Industries shares are owned by institutional investors. 1.9% of Modine Manufacturing shares are owned by company insiders. Comparatively, 1.2% of Armstrong World Industries shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

About Modine Manufacturing

Modine Manufacturing Company provides thermal management products and solutions in the United States, Italy, Hungary, China, the United Kingdom, and internationally. It operates through Climate Solutions and Performance Technologies segments. The company offers heat transfer coils, including heat recovery and round tube plate fin coils; gas-fired, hydronic, electric and oilfired unit heaters; roof-mounted direct- and indirect-fired makeup air units; duct furnaces; infrared units; perimeter heating products; single packaged unit ventilators; modular chillers; air handler and condensing units; ceiling cassettes; evaporator unit coolers, remote condensers, fluid coolers, gas coolers, and dry and brine coolers; and motor and generator cooling coils, transformer oil coolers, radiators, dryers, and industrial heat exchangers. It also provides data center products consisting of IT cooling solutions, including precision air conditioning units for data center applications; computer room air conditioning and handler units; hybrid fan coils; fan walls; chillers; condensers; condensing units; and liquid cooling solutions for high-density computing, as well as replacement parts, maintenance service and control solutions for existing equipment and new building management controls and systems. In addition, the company offers powertrain cooling products, such as radiators, condensers, engine cooling modules, charge air coolers, fan shrouds, and surge tanks; cooling module generator sets; aluminum and stainless steel engine oil coolers, exhaust gas recirculation coolers, liquid charge air coolers, transmission and retarder oil coolers, and chillers; battery thermal management systems, electronics cooling packages, battery chillers, battery cooling plates, coolers and casings for electronics cooling, and coolers for electric axles; and coatings products and application services. Modine Manufacturing Company was incorporated in 1916 and is headquartered in Racine, Wisconsin.

About Armstrong World Industries

Armstrong World Industries, Inc., together with its subsidiaries, engages in the design, manufacture, and sale of ceiling and wall solutions in the Americas. It operates through Mineral Fiber and Architectural Specialties segments. The company offers mineral fiber, fiberglass wool, metal, wood, felt, wood fiber, and glass-reinforced-gypsum; ceiling component products, such as ceiling perimeters and trims, as well as grid products that support drywall ceiling systems; ceilings, walls, and facades for use in commercial settings; and manufactures ceiling suspension system (grid) products. It serves commercial and residential construction markets, as well as renovation of existing buildings sectors. The company sells its products to resale distributors, ceiling system contractors, wholesalers, and retailers comprising large home centers. Armstrong World Industries, Inc. was founded in 1860 and is headquartered in Lancaster, Pennsylvania.