Critical Review: AZEK (NYSE:AZEK) vs. Mestek (OTCMKTS:MCCK)

AZEK (NYSE:AZEK) and Mestek (OTCMKTS:MCCK) are both construction companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Institutional and Insider Ownership

97.4% of AZEK shares are held by institutional investors. Comparatively, 0.4% of Mestek shares are held by institutional investors. 3.2% of AZEK shares are held by insiders. Comparatively, 65.2% of Mestek shares are held 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.

Analyst Ratings

This is a summary of recent ratings for AZEK and Mestek, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AZEK	0	10	7	0	2.41
Mestek	0	0	0	0	0.00

AZEK presently has a consensus price target of $53.93, suggesting a potential downside of 0.77%. Given AZEK’s stronger consensus rating and higher probable upside, equities research analysts clearly believe AZEK is more favorable than Mestek.

Valuation & Earnings

This table compares AZEK and Mestek”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AZEK	$1.52 billion	5.14	$153.38 million	$1.02	53.28
Mestek	$398.17 million	0.79	$59.39 million	$10.72	3.89

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

Volatility and Risk

AZEK has a beta of 1.82, meaning that its stock price is 82% more volatile than the S&P 500. Comparatively, Mestek has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500.

Profitability

This table compares AZEK and Mestek’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AZEK	9.92%	13.87%	8.63%
Mestek	20.17%	N/A	N/A

Summary

AZEK beats Mestek on 11 of the 14 factors compared between the two stocks.

About AZEK

The AZEK Company Inc. engages in the design, manufacturing, and selling of building products for residential, commercial, and industrial markets in the United States and Canada. It operates through two segments: Residential and Commercial. The Residential segment designs and manufactures engineered outdoor living products, such as decking, railing, trim and molding, siding and cladding, pergolas and cabanas, and accessories under the TimberTech, AZEK Exteriors, VERSATEX, ULTRALOX, StruXure, and INTEX brands. The Commercial segment offers bathroom partitions, shower and dressing stalls, lockers and other storage solutions, and engineered plastic sheet products under the Aria, Eclipse, Hiny Hiders, TuffTec, and Duralife brands. This segment also offers bathroom partitions, shower and dressing stalls, lockers, storage solutions, extruded plastic sheet, and non-fabricated products under the Aria, Eclipse, Hiny Hiders, TuffTec, and Duralife brands. The company was formerly known as Delaware corporation and changed its name to The AZEK Company Inc. in June 2020. The AZEK Company Inc. was incorporated in 2013 and is headquartered in Chicago, Illinois.

About Mestek

Mestek, Inc., together with its subsidiaries, manufactures and sells heating, ventilating, and air conditioning products and equipment; and metal forming equipment in the United States and internationally. The company offers equipment for heating, ventilation, and air conditioning primarily under the Lockformer, lowaPrecision, Engel, and Lion brands; roll forming and flexible fabrication equipment; metal stamping products, including uncoilers, straighteners, press feeds, and dies; and coil metal processing products, including cut-to-length, multi-blanking, and coil slitting and precision corrective levelers. It also provides a range of aftermarket services, such as OEM replacement parts for existing and used equipment, and on-site service support and training services. In addition, it engages in equipment rebuilding and electrical installation works; and tube and pipe production and fabrication. Further, the company offers custom metal-framed skylights, canopies, curtain walls, covered walkways, rain screens/wall-cladding, structural glass/point fixed glass, and ornamental metal products. Additionally, it provides operable and fixed solar shading louver systems; and architectural louvers, grilles, vision screens, penthouses, and brise soleil fixed sunshades. Mestek, Inc. was founded in 1898 and is based in Westfield, Massachusetts.