Critical Analysis: Quanex Building Products (NYSE:NX) versus Rockwool A/S (OTCMKTS:RKWBF)

Rockwool A/S (OTCMKTS:RKWBF) and Quanex Building Products (NYSE:NX) are both industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitability.

Dividends

Rockwool A/S pays an annual dividend of $1.00 per share and has a dividend yield of 3.4%. Quanex Building Products pays an annual dividend of $0.32 per share and has a dividend yield of 1.6%. Rockwool A/S pays out 17.8% of its earnings in the form of a dividend. Quanex Building Products pays out -5.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Earnings & Valuation

This table compares Rockwool A/S and Quanex Building Products”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rockwool A/S	N/A	N/A	N/A	$5.65	5.21
Quanex Building Products	$1.84 billion	0.49	-$250.81 million	($5.63)	-3.51

Rockwool A/S has higher earnings, but lower revenue than Quanex Building Products. Quanex Building Products is trading at a lower price-to-earnings ratio than Rockwool A/S, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

7.4% of Rockwool A/S shares are owned by institutional investors. Comparatively, 97.5% of Quanex Building Products shares are owned by institutional investors. 1.9% of Quanex Building Products shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Rockwool A/S and Quanex Building Products’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rockwool A/S	N/A	N/A	N/A
Quanex Building Products	-13.85%	11.11%	4.07%

Analyst Ratings

This is a summary of current ratings and recommmendations for Rockwool A/S and Quanex Building Products, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rockwool A/S	0	0	0	0	0.00
Quanex Building Products	1	1	1	0	2.00

Quanex Building Products has a consensus target price of $28.00, indicating a potential upside of 41.56%. Given Quanex Building Products’ stronger consensus rating and higher possible upside, analysts clearly believe Quanex Building Products is more favorable than Rockwool A/S.

Summary

Quanex Building Products beats Rockwool A/S on 9 of the 13 factors compared between the two stocks.

About Rockwool A/S

Rockwool A/S produces and sells stone wool insulation products in Western Europe, Eastern Europe, North America, Asia, and internationally. The company operates through two segments, Insulation and Systems segments. It offers fire-safe stone wool insulation under the ROCKWOOL brand name; acoustic solutions for ceilings and walls under the Rockfon brand name; board materials that are applied in ventilated constructions for facade cladding, soffits, roof detailing, and fascia under the Rockpanel brand name; and rootzone management solutions for controlled environment agriculture under the Grodan brand name. The company also provides stone wool-based products used in the areas of rainwater management and prefab building systems, railway vibration control, automotive, and industrial OEM applications under the ROCKWOOL, Rockdelta, and Lapinus brand names. Rockwool A/S was founded in 1909 and is based in Hedehusene, Denmark.

About Quanex Building Products

Quanex Building Products Corporation, together with its subsidiaries, provides components for the fenestration industry in the United States, rest of Europe, Canada, Asia, the United Kingdom, and internationally. The company operates through three segments: North American Fenestration, European Fenestration, and North American Cabinet Components. It offers flexible insulating glass spacers, extruded vinyl profiles, window and door screens, and precision-formed metal and wood products, as well as cabinet doors and other components for original equipment manufacturers (OEMs) in the kitchen and bathroom cabinet industry. In addition, the company provides various non-fenestration components and products, including solar panel sealants, trim moldings, vinyl decking, fencing, water retention barriers, and conservatory roof components. It sells its products to OEMs in the building products industry through sales representatives, direct sales force, distributors, and independent sales agents. Quanex Building Products Corporation was founded in 1927 and is based in Houston, Texas.