Contrasting Worthington Enterprises (NYSE:WOR) and Trex (NYSE:TREX)

Worthington Enterprises (NYSE:WOR) and Trex (NYSE:TREX) are both mid-cap construction companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, valuation, institutional ownership, analyst recommendations, earnings, risk and dividends.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Worthington Enterprises and Trex, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Worthington Enterprises	1	2	2	1	2.50
Trex	1	8	6	2	2.53

Worthington Enterprises currently has a consensus price target of $62.33, indicating a potential upside of 12.34%. Trex has a consensus price target of $71.93, indicating a potential upside of 36.50%. Given Trex’s stronger consensus rating and higher probable upside, analysts clearly believe Trex is more favorable than Worthington Enterprises.

Volatility & Risk

Worthington Enterprises has a beta of 1.17, indicating that its share price is 17% more volatile than the S&P 500. Comparatively, Trex has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.

Profitability

This table compares Worthington Enterprises and Trex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Worthington Enterprises	8.91%	17.70%	9.80%
Trex	16.53%	21.27%	13.41%

Earnings and Valuation

This table compares Worthington Enterprises and Trex”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Worthington Enterprises	$1.15 billion	2.39	$96.05 million	$2.13	26.05
Trex	$1.15 billion	4.91	$226.39 million	$1.73	30.46

Trex has lower revenue, but higher earnings than Worthington Enterprises. Worthington Enterprises is trading at a lower price-to-earnings ratio than Trex, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

51.6% of Worthington Enterprises shares are owned by institutional investors. Comparatively, 96.0% of Trex shares are owned by institutional investors. 3.4% of Worthington Enterprises shares are owned by insiders. Comparatively, 0.7% of Trex shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Trex beats Worthington Enterprises on 12 of the 15 factors compared between the two stocks.

About Worthington Enterprises

Worthington Enterprises, Inc. operates as an industrial manufacturing company. It operates through three segments: Building Products, Consumer Products, and Sustainable Energy Solutions. The Building Products segment sells refrigerant and LPG cylinders, well water and expansion tanks, fire suppression tanks, chemical tanks, and foam and adhesive tanks for gas producers, and distributors. The Consumer Products segment provides products in the tools, outdoor living, and celebrations end markets. Its products include propane-filled cylinders for torches, camping stoves and other applications, LPG cylinders, handheld torches, helium-filled balloon kits, specialized hand tools and instruments, and drywall tools and accessories This segment sells its products primarily to mass merchandisers, retailers, and distributors under the Coleman, Bernzomatic, Balloon Time, Mag-Torch, General, Garden-Weasel, Pactool International, Hawkeye, Worthington Pro Grade, and Level5 brands. The Sustainable Energy Solutions segment sells onboard fueling systems and services, as well as gas containment solutions and services for storage, transport, and distribution of industrial gases. It includes high pressure and acetylene cylinders for life support systems and alternative fuel cylinders used to hold CNG and hydrogen for automobiles, buses, and light-duty trucks. The company was formerly known as Worthington Industries, Inc. Worthington Enterprises, Inc. was founded in 1955 and is headquartered in Columbus, Ohio.

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.