Reviewing Simpson Manufacturing (NYSE:SSD) and Frontdoor (NASDAQ:FTDR)

Frontdoor (NASDAQ:FTDR) and Simpson Manufacturing (NYSE:SSD) are both mid-cap construction companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, valuation, profitability, dividends and earnings.

Institutional & Insider Ownership

93.7% of Simpson Manufacturing shares are owned by institutional investors. 1.5% of Frontdoor shares are owned by company insiders. Comparatively, 0.4% of Simpson Manufacturing shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Frontdoor and Simpson Manufacturing”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frontdoor	$1.84 billion	2.11	$235.00 million	$3.51	15.38
Simpson Manufacturing	$2.23 billion	3.13	$322.22 million	$8.21	20.50

Simpson Manufacturing has higher revenue and earnings than Frontdoor. Frontdoor is trading at a lower price-to-earnings ratio than Simpson Manufacturing, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Frontdoor has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500. Comparatively, Simpson Manufacturing has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Frontdoor and Simpson Manufacturing, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frontdoor	1	3	2	0	2.17
Simpson Manufacturing	0	2	1	0	2.33

Frontdoor presently has a consensus price target of $59.75, indicating a potential upside of 10.67%. Simpson Manufacturing has a consensus price target of $201.00, indicating a potential upside of 19.42%. Given Simpson Manufacturing’s stronger consensus rating and higher possible upside, analysts clearly believe Simpson Manufacturing is more favorable than Frontdoor.

Profitability

This table compares Frontdoor and Simpson Manufacturing’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frontdoor	12.87%	122.74%	14.33%
Simpson Manufacturing	14.90%	18.11%	11.90%

Summary

Simpson Manufacturing beats Frontdoor on 10 of the 14 factors compared between the two stocks.

About Frontdoor

Frontdoor, Inc. provides home warranties in the United States in the United States. Its customizable home warranties help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances. The company’s home warranty customers subscribe to an annual service plan agreement that covers the repair or replacement of principal components of approximately 20 home systems and appliances, including electrical, plumbing, water heaters, refrigerators, dishwashers, and ranges/ovens/cooktops, as well as electronics, pools, and spas and pumps; and heating, ventilation, and air conditioning systems. It also offers on-demand home services and a one-stop app experience for home repair and maintenance; and Streem technology, an app that empowers homeowners by connecting them in real time through video chat with qualified experts to diagnose and solve their problems. The company serves homeowners under the Frontdoor, American Home Shield, HSA, OneGuard, Landmark Home Warranty, Frontdoor logo, and Streem brands. The company was founded in 1971 and is headquartered in Memphis, Tennessee.

About Simpson Manufacturing

Simpson Manufacturing Co., Inc., through its subsidiaries, designs, engineers, manufactures, and sells structural solutions for wood, concrete, and steel connections. The company offers wood construction products, including connectors, truss plates, fastening systems, fasteners and shearwalls, and pre-fabricated lateral systems for use in light-frame construction; and concrete construction products comprising adhesives, specialty chemicals, mechanical anchors, carbide drill bits, powder actuated tools, fiber-reinforced materials, and other repair products for use in concrete, masonry, and steel construction, as well as grouts, coatings, sealers, mortars, fiberglass and fiber-reinforced polymer systems, and asphalt products for use in concrete construction repair, and strengthening and protection products. It also provides connectors and lateral products for wood framing, timber and offsite construction, structural steel construction, and cold-formed steel applications; and mechanical and adhesive anchors for concrete and masonry construction applications. In addition, the company offers engineering and design services, as well as software solutions that facilitate the specification, selection, and use of its products. It markets its products to the residential construction, light industrial and commercial construction, infrastructure construction, remodeling, and do-it-yourself markets in the United States, Canada, France, the United Kingdom, Germany, Denmark, Switzerland, Portugal, Poland, the Netherlands, Belgium, Spain, Italy, Romania, Sweden, Norway, Australia, New Zealand, China, Taiwan, and Vietnam. The company was founded in 1956 and is headquartered in Pleasanton, California.