Head to Head Analysis: Advanced Drainage Systems (NYSE:WMS) & James Hardie Industries (NYSE:JHX)

Advanced Drainage Systems (NYSE:WMS) and James Hardie Industries (NYSE:JHX) are both construction companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitability, dividends, earnings, risk, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares Advanced Drainage Systems and James Hardie Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Advanced Drainage Systems	14.82%	29.57%	12.23%
James Hardie Industries	8.75%	27.95%	10.84%

Valuation and Earnings

This table compares Advanced Drainage Systems and James Hardie Industries”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Advanced Drainage Systems	$2.90 billion	3.82	$450.17 million	$5.54	25.79
James Hardie Industries	$3.88 billion	2.44	$424.00 million	$0.77	28.56

Advanced Drainage Systems has higher earnings, but lower revenue than James Hardie Industries. Advanced Drainage Systems is trading at a lower price-to-earnings ratio than James Hardie Industries, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for Advanced Drainage Systems and James Hardie Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Advanced Drainage Systems	0	2	7	0	2.78
James Hardie Industries	0	4	9	1	2.79

Advanced Drainage Systems presently has a consensus price target of $152.56, indicating a potential upside of 6.77%. James Hardie Industries has a consensus price target of $32.39, indicating a potential upside of 47.30%. Given James Hardie Industries’ stronger consensus rating and higher possible upside, analysts clearly believe James Hardie Industries is more favorable than Advanced Drainage Systems.

Volatility & Risk

Advanced Drainage Systems has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500. Comparatively, James Hardie Industries has a beta of 1.79, meaning that its stock price is 79% more volatile than the S&P 500.

Institutional and Insider Ownership

89.8% of Advanced Drainage Systems shares are owned by institutional investors. Comparatively, 8.0% of James Hardie Industries shares are owned by institutional investors. 1.6% of Advanced Drainage Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Advanced Drainage Systems beats James Hardie Industries on 8 of the 15 factors compared between the two stocks.

About Advanced Drainage Systems

Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products in North America and internationally. The company operates through Pipe, International, Infiltrator, and Allied Products & Other segments. It offers single, double, and triple wall corrugated polypropylene and polyethylene pipes; plastic leachfield chambers and systems; EZflow synthetic aggregate bundles; wastewater purification through mechanical aeration wastewater for residential and commercial systems; septic tanks and accessories; combined treatment and dispersal systems, including advanced enviro-septic and advanced treatment leachfield systems; and allied products, including storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators. The company also purchases and distributes construction fabrics and other geosynthetic products for soil stabilization, reinforcement, filtration, separation, erosion control, and sub-surface drainage, as well as drainage grates and other products. In addition, it provides PVC hubs, rubber sleeves, and stainless-steel bands. The company offers its products for non-residential, residential, agriculture, and infrastructure applications through a network of distribution centers. Advanced Drainage Systems, Inc. incorporated in 1966 and is headquartered in Hilliard, Ohio.

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.