Financial Analysis: Simpson Manufacturing (NYSE:SSD) vs. Aspen Aerogels (NYSE:ASPN)

Aspen Aerogels (NYSE:ASPN) and Simpson Manufacturing (NYSE:SSD) are both construction companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares Aspen Aerogels and Simpson Manufacturing”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aspen Aerogels	$452.70 million	1.21	$13.38 million	($3.49)	-1.91
Simpson Manufacturing	$2.23 billion	3.00	$322.22 million	$7.68	20.83

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

Analyst Recommendations

This is a breakdown of recent recommendations for Aspen Aerogels and Simpson Manufacturing, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aspen Aerogels	0	3	7	1	2.82
Simpson Manufacturing	0	1	1	0	2.50

Aspen Aerogels currently has a consensus target price of $18.44, indicating a potential upside of 176.32%. Simpson Manufacturing has a consensus target price of $188.50, indicating a potential upside of 17.82%. Given Aspen Aerogels’ stronger consensus rating and higher possible upside, equities analysts plainly believe Aspen Aerogels is more favorable than Simpson Manufacturing.

Institutional & Insider Ownership

97.6% of Aspen Aerogels shares are held by institutional investors. Comparatively, 93.7% of Simpson Manufacturing shares are held by institutional investors. 4.3% of Aspen Aerogels shares are held by insiders. Comparatively, 0.4% of Simpson Manufacturing shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Aspen Aerogels and Simpson Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aspen Aerogels	-65.47%	6.69%	4.39%
Simpson Manufacturing	14.49%	17.80%	11.56%

Volatility & Risk

Aspen Aerogels has a beta of 2.65, indicating that its stock price is 165% more volatile than the S&P 500. Comparatively, Simpson Manufacturing has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.

Summary

Simpson Manufacturing beats Aspen Aerogels on 8 of the 15 factors compared between the two stocks.

About Aspen Aerogels

Aspen Aerogels, Inc. designs, develops, manufactures, and sells aerogel insulation products primarily for use in the energy infrastructure and sustainable insulation materials markets in the United States, Asia, Canada, Europe, and Latin America. It operates in two segments, Energy Industrial and Thermal Barrier. The company offers PyroThin thermal barriers for use in lithium-ion batteries in electric vehicles and energy storage industries; Pyrogel XTE that reduces the risk of corrosion under insulation in energy infrastructure operating systems; and Pyrogel HPS for applications within the power generation market. It also offers Pyrogel XTF to provide protection against fire; Cryogel Z for sub-ambient and cryogenic applications in the energy infrastructure market; Spaceloft Subsea for use in pipe-in-pipe applications in offshore oil production; and Cryogel X201, which is used in designing cold systems, such as refrigerated appliances, cold storage equipment, and aerospace systems. The company was founded in 2001 and is headquartered in Northborough, Massachusetts.

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.