Critical Comparison: Advanced Drainage Systems (NYSE:WMS) versus MasterBrand (NYSE:MBC)

Advanced Drainage Systems (NYSE:WMS) and MasterBrand (NYSE:MBC) are both industrials companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.

Earnings and Valuation

This table compares Advanced Drainage Systems and MasterBrand”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Advanced Drainage Systems	$3.05 billion	3.14	$426.46 million	$5.79	21.92
MasterBrand	$2.78 billion	0.49	$26.70 million	($0.69)	-9.67

Advanced Drainage Systems has higher revenue and earnings than MasterBrand. MasterBrand is trading at a lower price-to-earnings ratio than Advanced Drainage Systems, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Advanced Drainage Systems and MasterBrand’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Advanced Drainage Systems	14.00%	28.28%	12.30%
MasterBrand	-3.49%	3.65%	1.60%

Analyst Ratings

This is a breakdown of current ratings for Advanced Drainage Systems and MasterBrand, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Advanced Drainage Systems	0	2	8	0	2.80
MasterBrand	1	1	0	0	1.50

Advanced Drainage Systems currently has a consensus price target of $188.20, suggesting a potential upside of 48.27%. MasterBrand has a consensus price target of $10.00, suggesting a potential upside of 49.81%. Given MasterBrand’s higher probable upside, analysts plainly believe MasterBrand is more favorable than Advanced Drainage Systems.

Volatility and Risk

Advanced Drainage Systems has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, MasterBrand has a beta of 1.48, meaning that its share price is 48% more volatile than the S&P 500.

Institutional and Insider Ownership

89.8% of Advanced Drainage Systems shares are held by institutional investors. Comparatively, 87.3% of MasterBrand shares are held by institutional investors. 1.7% of Advanced Drainage Systems shares are held by company insiders. Comparatively, 2.8% of MasterBrand shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Advanced Drainage Systems beats MasterBrand on 11 of the 14 factors compared between the two stocks.

About Advanced Drainage Systems

Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products in North America and internationally. The company operates through Pipe, International, Infiltrator, and Allied Products & Other segments. It offers single, double, and triple wall corrugated polypropylene and polyethylene pipes; plastic leachfield chambers and systems; EZflow synthetic aggregate bundles; wastewater purification through mechanical aeration wastewater for residential and commercial systems; septic tanks and accessories; combined treatment and dispersal systems, including advanced enviro-septic and advanced treatment leachfield systems; and allied products, including storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators. The company also purchases and distributes construction fabrics and other geosynthetic products for soil stabilization, reinforcement, filtration, separation, erosion control, and sub-surface drainage, as well as drainage grates and other products. In addition, it provides PVC hubs, rubber sleeves, and stainless-steel bands. The company offers its products for non-residential, residential, agriculture, and infrastructure applications through a network of distribution centers. Advanced Drainage Systems, Inc. incorporated in 1966 and is headquartered in Hilliard, Ohio.

About MasterBrand

MasterBrand, Inc. engages in the manufacture and sale of residential cabinets in the United States and Canada. The company offers a range of residential cabinetry products for the kitchen, bathroom, and other parts of the home. It sells its products to remodeling and new construction markets through dealers, retailers, and builders. The company was formerly known as United Cabinet Incorporated. MasterBrand, Inc. was founded in 1954 and is headquartered in Beachwood, Ohio.