Comparing Johnson Controls International (NYSE:JCI) & Trex (NYSE:TREX)

Trex (NYSE:TREX) and Johnson Controls International (NYSE:JCI) are both construction companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Profitability

This table compares Trex and Johnson Controls International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trex	16.53%	21.27%	13.41%
Johnson Controls International	9.53%	14.71%	5.91%

Analyst Ratings

This is a summary of recent recommendations and price targets for Trex and Johnson Controls International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trex	1	7	6	2	2.56
Johnson Controls International	0	10	9	0	2.47

Trex presently has a consensus target price of $71.93, suggesting a potential upside of 19.44%. Johnson Controls International has a consensus target price of $105.72, suggesting a potential downside of 0.21%. Given Trex’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Trex is more favorable than Johnson Controls International.

Volatility & Risk

Trex has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500. Comparatively, Johnson Controls International has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Insider and Institutional Ownership

96.0% of Trex shares are held by institutional investors. Comparatively, 90.1% of Johnson Controls International shares are held by institutional investors. 0.7% of Trex shares are held by insiders. Comparatively, 0.5% of Johnson Controls International shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Trex and Johnson Controls International”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Trex	$1.15 billion	5.61	$226.39 million	$1.73	34.81
Johnson Controls International	$22.95 billion	3.02	$1.71 billion	$3.37	31.44

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

Summary

Trex beats Johnson Controls International on 11 of the 15 factors compared between the two stocks.

About Trex

Trex Company, Inc. manufactures and distributes composite decking, railing, and outdoor living products and accessories for residential and commercial markets in the United States. It offers decking products and accessories under the names Trex Transcend, Trex Select, Trex Signature, Trex Transcend Lineage, and Trex Enhance for protection against fading, staining, mold, and scratching; Trex Hideaway, a hidden fastening system; and Trex DeckLighting, a LED dimmable deck lighting for use on posts, floors, and steps. The company also provides Trex Transcend Railing products that are used in Trex decking products and other decking materials; Trex Select Railing products for a simple clean finished look; Trex Enhance Railing system; Trex Signature aluminum railing for a contemporary look; and Trex Select T-Rail railing products. In addition, it offers Trex Seclusions, a fencing product that includes structural posts, bottom and top rails, pickets, and decorative post caps. Further, the company acts as a licensor in various licensing agreements with third parties to manufacture and sell products under the Trex name, including Trex Outdoor Furniture; Trex RainEscape, an above joist deck drainage system; Trex Pergola, a cellular PVC product; Trex Latticeworks outdoor lattice boards; Trex Cornhole boards; Diablo Trex Blade, a saw blade for wood-alternative composite decking; Trex SpiralStairs and structural steel posts; and Trex Outdoor Kitchens, cabinetry, and Storage products. It sells its products through wholesale distributors, retail lumber dealers, and Home Depot and Lowe’s stores. Trex Company, Inc. was founded in 1996 and is headquartered in Winchester, Virginia.

About Johnson Controls International

Johnson Controls International plc, together with its subsidiaries, engages in engineering, manufacturing, commissioning, and retrofitting building products and systems in the United States, Europe, the Asia Pacific, and internationally. It operates in four segments: Building Solutions North America, Building Solutions EMEA/LA, Building Solutions Asia Pacific, and Global Products. The company designs, sells, installs, and services heating, ventilating, air conditioning, controls, building management, refrigeration, integrated electronic security, integrated fire detection and suppression systems, and fire protection and security products for commercial, industrial, retail, small business, institutional, and governmental customers. It also provides energy efficiency solutions and technical services, including inspection, scheduled maintenance, and repair and replacement of mechanical and control systems, as well as data-driven smart building solutions to non-residential building and industrial applications. In addition, the company offers control software and software services for residential and commercial applications. Johnson Controls International plc was incorporated in 1885 and is headquartered in Cork, Ireland.