Critical Survey: Caesarstone (NASDAQ:CSTE) vs. Builders FirstSource (NYSE:BLDR)

Builders FirstSource (NYSE:BLDR) and Caesarstone (NASDAQ:CSTE) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, earnings, valuation, profitability and analyst recommendations.

Earnings & Valuation

This table compares Builders FirstSource and Caesarstone”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Builders FirstSource	$14.45 billion	0.42	$435.20 million	$0.91	62.51
Caesarstone	$381.81 million	0.21	-$137.47 million	($4.13)	-0.57

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

Profitability

This table compares Builders FirstSource and Caesarstone’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Builders FirstSource	0.71%	11.73%	4.32%
Caesarstone	-37.37%	-32.36%	-11.71%

Risk & Volatility

Builders FirstSource has a beta of 1.45, indicating that its stock price is 45% more volatile than the S&P 500. Comparatively, Caesarstone has a beta of 0.41, indicating that its stock price is 59% less volatile than the S&P 500.

Insider & Institutional Ownership

95.5% of Builders FirstSource shares are held by institutional investors. Comparatively, 33.7% of Caesarstone shares are held by institutional investors. 2.7% of Builders FirstSource shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Builders FirstSource and Caesarstone, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Builders FirstSource	2	14	8	0	2.25
Caesarstone	1	0	0	0	1.00

Builders FirstSource currently has a consensus target price of $82.25, indicating a potential upside of 44.60%. Given Builders FirstSource’s stronger consensus rating and higher probable upside, equities analysts plainly believe Builders FirstSource is more favorable than Caesarstone.

Summary

Builders FirstSource beats Caesarstone on 14 of the 14 factors compared between the two stocks.

About Builders FirstSource

Builders FirstSource, Inc., together with its subsidiaries, manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, sub-contractors, remodelers, and consumers in the United States. It offers lumber and lumber sheet goods comprising dimensional lumber, plywood, and oriented strand board products that are used in on-site house framing; manufactured products, such as wood floor and roof trusses, floor trusses, wall panels, stairs, and engineered wood products; and windows, and interior and exterior door units, as well as interior trims and custom products comprising intricate mouldings, stair parts, and columns under the Synboard brand name. The company also provides specialty building products and services, including vinyl, composite and wood siding, exterior trims, metal studs, cement, roofing, insulation, wallboards, ceilings, cabinets, and hardware products; turn-key framing, shell construction, design assistance, and professional installation services. In addition, it offers software products, such as drafting, estimating, quoting, and virtual home design services, which provide software solutions to retailers, distributors, manufacturers, and homebuilders. The company was formerly known as BSL Holdings, Inc. and changed its name to Builders FirstSource, Inc. in October 1999. Builders FirstSource, Inc. was incorporated in 1998 and is based in Irving, Texas.

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.