DIRTT Environmental Solutions (NASDAQ:DRTT) versus Simpson Manufacturing (NYSE:SSD) Financial Analysis

DIRTT Environmental Solutions (NASDAQ:DRTT) and Simpson Manufacturing (NYSE:SSD) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.

Institutional and Insider Ownership

58.7% of DIRTT Environmental Solutions shares are owned by institutional investors. Comparatively, 93.7% of Simpson Manufacturing shares are owned by institutional investors. 40.5% of DIRTT Environmental Solutions shares are owned by insiders. Comparatively, 0.3% of Simpson Manufacturing shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares DIRTT Environmental Solutions and Simpson Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DIRTT Environmental Solutions	-12.81%	-150.32%	-15.10%
Simpson Manufacturing	15.65%	18.45%	12.32%

Risk and Volatility

DIRTT Environmental Solutions has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500. Comparatively, Simpson Manufacturing has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for DIRTT Environmental Solutions and Simpson Manufacturing, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DIRTT Environmental Solutions	0	0	0	0	0.00
Simpson Manufacturing	1	2	3	0	2.33

Simpson Manufacturing has a consensus target price of $216.25, suggesting a potential upside of 9.24%. Given Simpson Manufacturing’s stronger consensus rating and higher possible upside, analysts clearly believe Simpson Manufacturing is more favorable than DIRTT Environmental Solutions.

Valuation & Earnings

This table compares DIRTT Environmental Solutions and Simpson Manufacturing”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DIRTT Environmental Solutions	$170.63 million	0.37	-$54.96 million	($0.25)	-2.42
Simpson Manufacturing	$2.33 billion	3.49	$345.08 million	$9.15	21.63

Simpson Manufacturing has higher revenue and earnings than DIRTT Environmental Solutions. DIRTT Environmental Solutions is trading at a lower price-to-earnings ratio than Simpson Manufacturing, indicating that it is currently the more affordable of the two stocks.

Summary

Simpson Manufacturing beats DIRTT Environmental Solutions on 13 of the 14 factors compared between the two stocks.

About DIRTT Environmental Solutions

DIRTT Environmental Solutions Ltd. operates as a interior construction company in Canada. Its ICE software provides the industrialized construction system to design, visualize, organize, configure, and install the job. The company offers interior solutions to doors, casework, timber, electrical, networks, access floors, solid, glass, combination, leaf folding, and headwalls. It serves retail, technology, hospitality, manufacturing, energy, healthcare, education, government, military, professional, and financial service sectors. DIRTT Environmental Solutions Ltd. was incorporated in 2003 and is headquartered in Calgary, Canada.

About Simpson Manufacturing

Simpson Manufacturing Co., Inc., through its subsidiaries, designs, engineers, manufactures, and sells structural solutions for wood, concrete, and steel connections. The company offers wood construction products, including connectors, truss plates, fastening systems, fasteners and shearwalls, and pre-fabricated lateral systems for use in light-frame construction; and concrete construction products comprising adhesives, specialty chemicals, mechanical anchors, carbide drill bits, powder actuated tools, fiber-reinforced materials, and other repair products for use in concrete, masonry, and steel construction, as well as grouts, coatings, sealers, mortars, fiberglass and fiber-reinforced polymer systems, and asphalt products for use in concrete construction repair, and strengthening and protection products. It also provides connectors and lateral products for wood framing, timber and offsite construction, structural steel construction, and cold-formed steel applications; and mechanical and adhesive anchors for concrete and masonry construction applications. In addition, the company offers engineering and design services, as well as software solutions that facilitate the specification, selection, and use of its products. It markets its products to the residential construction, light industrial and commercial construction, infrastructure construction, remodeling, and do-it-yourself markets in the United States, Canada, France, the United Kingdom, Germany, Denmark, Switzerland, Portugal, Poland, the Netherlands, Belgium, Spain, Italy, Romania, Sweden, Norway, Australia, New Zealand, China, Taiwan, and Vietnam. The company was founded in 1956 and is headquartered in Pleasanton, California.