Comparing TopBuild (NYSE:BLD) & Armstrong World Industries (NYSE:AWI)

TopBuild (NYSE:BLD) and Armstrong World Industries (NYSE:AWI) are both construction companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Risk and Volatility

TopBuild has a beta of 1.63, meaning that its share price is 63% more volatile than the S&P 500. Comparatively, Armstrong World Industries has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.

Profitability

This table compares TopBuild and Armstrong World Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TopBuild	11.40%	28.32%	12.73%
Armstrong World Industries	18.95%	39.80%	16.79%

Valuation & Earnings

This table compares TopBuild and Armstrong World Industries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TopBuild	$5.22 billion	2.31	$622.60 million	$20.31	21.06
Armstrong World Industries	$1.56 billion	5.37	$264.90 million	$6.76	28.66

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

Analyst Recommendations

This is a breakdown of recent ratings and price targets for TopBuild and Armstrong World Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TopBuild	0	4	8	1	2.77
Armstrong World Industries	0	4	4	0	2.50

TopBuild presently has a consensus price target of $394.6667, suggesting a potential downside of 7.73%. Armstrong World Industries has a consensus price target of $177.1250, suggesting a potential downside of 8.57%. Given TopBuild’s stronger consensus rating and higher probable upside, equities analysts clearly believe TopBuild is more favorable than Armstrong World Industries.

Institutional & Insider Ownership

95.7% of TopBuild shares are held by institutional investors. Comparatively, 98.9% of Armstrong World Industries shares are held by institutional investors. 0.4% of TopBuild shares are held by insiders. Comparatively, 1.0% of Armstrong World Industries shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

TopBuild beats Armstrong World Industries on 8 of the 15 factors compared between the two stocks.

About TopBuild

TopBuild Corp., together with its subsidiaries, engages in the installation and distribution of insulation and other building material products to the construction industry. The company operates in two segments, Installation and Specialty Distribution. It provides insulation products and accessories, glass and windows, rain gutters, garage doors, fireplaces, roofing materials, closet shelving, and other products. The company also offers insulation installation services for fiberglass batts and rolls, blown-in loose fill fiberglass, polyurethane spray foam, and blown-in loose fill cellulose applications. In addition, it distributes building and mechanical insulation, insulation accessories, and other building product materials for the residential, commercial, and industrial end markets. The company serves single-family homebuilders, single-family custom builders, multi-family builders, commercial general contractors, remodelers, and individual homeowners, as well as insulation contractors, gutter contractors, weatherization contractors, other contractors, dealers, metal building erectors, and modular home builders. It operates installation branches and distribution centers in the United States and Canada. The company was formerly known as Masco SpinCo Corp. and changed its name to TopBuild Corp. in March 2015. TopBuild Corp. was incorporated in 2015 and is headquartered in Daytona Beach, Florida.

About Armstrong World Industries

Armstrong World Industries, Inc., together with its subsidiaries, engages in the design, manufacture, and sale of ceiling and wall solutions in the Americas. It operates through Mineral Fiber and Architectural Specialties segments. The company offers mineral fiber, fiberglass wool, metal, wood, felt, wood fiber, and glass-reinforced-gypsum; ceiling component products, such as ceiling perimeters and trims, as well as grid products that support drywall ceiling systems; ceilings, walls, and facades for use in commercial settings; and manufactures ceiling suspension system (grid) products. It serves commercial and residential construction markets, as well as renovation of existing buildings sectors. The company sells its products to resale distributors, ceiling system contractors, wholesalers, and retailers comprising large home centers. Armstrong World Industries, Inc. was founded in 1860 and is headquartered in Lancaster, Pennsylvania.