Financial Analysis: James Hardie Industries (JHX) and Its Peers

James Hardie Industries (NYSE:JHX) is one of 38 public companies in the “BLDG&CONST – MISC” industry, but how does it contrast to its peers? We will compare James Hardie Industries to similar companies based on the strength of its earnings, profitability, analyst recommendations, risk, dividends, valuation and institutional ownership.

Volatility & Risk

James Hardie Industries has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500. Comparatively, James Hardie Industries’ peers have a beta of 0.99, meaning that their average share price is 1% less volatile than the S&P 500.

Profitability

This table compares James Hardie Industries and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
James Hardie Industries	10.94%	31.52%	12.86%
James Hardie Industries Competitors	-11.01%	65.74%	4.94%

Insider and Institutional Ownership

8.0% of James Hardie Industries shares are held by institutional investors. Comparatively, 91.0% of shares of all “BLDG&CONST – MISC” companies are held by institutional investors. 3.8% of shares of all “BLDG&CONST – MISC” companies are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for James Hardie Industries and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
James Hardie Industries	0	1	5	0	2.83
James Hardie Industries Competitors	241	1409	2265	108	2.56

James Hardie Industries currently has a consensus target price of $39.12, suggesting a potential upside of 61.35%. As a group, “BLDG&CONST – MISC” companies have a potential upside of 17.30%. Given James Hardie Industries’ stronger consensus rating and higher possible upside, equities analysts plainly believe James Hardie Industries is more favorable than its peers.

Earnings & Valuation

This table compares James Hardie Industries and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
James Hardie Industries	$3.88 billion	$424.00 million	24.74
James Hardie Industries Competitors	$6.91 billion	$580.08 million	22.50

James Hardie Industries’ peers have higher revenue and earnings than James Hardie Industries. James Hardie Industries is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

James Hardie Industries beats its peers on 7 of the 13 factors compared.

About James Hardie Industries

James Hardie Industries plc manufactures and sells fiber cement, fiber gypsum, and cement bonded building products for interior and exterior building construction applications primarily in the United States, Australia, Europe, New Zealand, and the Philippines. The company operates through North America Fiber Cement, Asia Pacific Fiber Cement, and Europe Building Products segments. It offers fiber cement interior linings, exterior siding products, and related accessories; and various fiber cement products for a range of applications, including external cladding, internal walls, ceilings, floors, soffits, fences, and facades. The company also provides fiber gypsum and cement-bonded boards for use in the timber frame construction, dry lining, DIY, and structural fire protection applications. Its products are used in residential repair and remodel, and commercial and residential new construction markets James Hardie Industries plc was founded in 1888 and is based in Dublin, Ireland.