Armstrong World Industries (NYSE:AWI – Get Free Report) and James Hardie Industries (NYSE:JHX – Get Free Report) are both mid-cap construction companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, earnings, analyst recommendations, risk and profitability.
Profitability
This table compares Armstrong World Industries and James Hardie Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Armstrong World Industries | 18.95% | 39.80% | 16.79% |
| James Hardie Industries | 8.75% | 27.95% | 10.84% |
Institutional & Insider Ownership
98.9% of Armstrong World Industries shares are owned by institutional investors. Comparatively, 8.0% of James Hardie Industries shares are owned by institutional investors. 1.0% of Armstrong World Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Risk and Volatility
Analyst Ratings
This is a breakdown of recent ratings and target prices for Armstrong World Industries and James Hardie Industries, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Armstrong World Industries | 0 | 4 | 4 | 0 | 2.50 |
| James Hardie Industries | 0 | 1 | 8 | 1 | 3.00 |
Armstrong World Industries presently has a consensus target price of $177.13, suggesting a potential downside of 10.35%. James Hardie Industries has a consensus target price of $33.27, suggesting a potential upside of 65.48%. Given James Hardie Industries’ stronger consensus rating and higher probable upside, analysts plainly believe James Hardie Industries is more favorable than Armstrong World Industries.
Valuation & Earnings
This table compares Armstrong World Industries and James Hardie Industries”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Armstrong World Industries | $1.45 billion | 5.91 | $264.90 million | $6.76 | 29.23 |
| James Hardie Industries | $3.88 billion | 2.23 | $424.00 million | $0.77 | 26.11 |
James Hardie Industries has higher revenue and earnings than Armstrong World Industries. James Hardie Industries 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.
Summary
Armstrong World Industries beats James Hardie Industries on 8 of the 15 factors compared between the two stocks.
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.
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.
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