Contrasting Caesarstone (NASDAQ:CSTE) and Armstrong World Industries (NYSE:AWI)

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Caesarstone and Armstrong World Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Caesarstone	0	0	0	0	0.00
Armstrong World Industries	0	4	4	0	2.50

Armstrong World Industries has a consensus target price of $177.13, indicating a potential downside of 11.03%. Given Armstrong World Industries’ stronger consensus rating and higher probable upside, analysts plainly believe Armstrong World Industries is more favorable than Caesarstone.

Earnings and Valuation

This table compares Caesarstone and Armstrong World Industries”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Caesarstone	$443.22 million	0.11	-$42.83 million	($1.63)	-0.88
Armstrong World Industries	$1.45 billion	5.96	$264.90 million	$6.76	29.45

Armstrong World Industries has higher revenue and earnings than Caesarstone. Caesarstone 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.

Insider & Institutional Ownership

33.7% of Caesarstone shares are held by institutional investors. Comparatively, 98.9% of Armstrong World Industries shares are held by institutional investors. 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 will outperform the market over the long term.

Volatility and Risk

Caesarstone has a beta of 0.23, meaning that its share price is 77% less volatile than the S&P 500. Comparatively, Armstrong World Industries has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Caesarstone	-14.77%	-16.14%	-7.93%
Armstrong World Industries	18.95%	39.80%	16.79%

Summary

Armstrong World Industries beats Caesarstone on 14 of the 14 factors compared between the two stocks.

About Caesarstone

Caesarstone Ltd., together with its subsidiaries, designs, develops, manufactures, and markets engineered stone and other materials under the Caesarstone brand in the United States, Canada, Latin America, Australia, Asia, Europe, the Middle East and Africa, and Israel. The company’s engineered stone slabs are primarily used as indoor and outdoor kitchen countertops in the renovation and remodeling, and residential construction sectors. Its products are also used in other applications, such as vanity tops, wall panels, back splashes, floor tiles, stairs, furniture, and other interior and exterior surfaces that are used in various residential and non-residential applications. The company also offers porcelain products under the Lioli brand for countertops, flooring, and cladding applications; sells natural stone, sinks, and various ancillary fabrication tools and materials; and resells natural stones, as well as various ancillaries, and fabrication and installation accessories, as well as provides fabrication and installation services. It sells its products directly to wholesalers, resellers, and fabricators; and through direct sales force and indirect network of independent distributors. The company was formerly known as Caesarstone Sdot Yam Ltd. and changed its name to Caesarstone Ltd. in June 2016. Caesarstone Ltd. was founded in 1987 and is headquartered in Menashe, Israel.

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.