Financial Contrast: James Hardie Industries (NYSE:JHX) vs. Masco (NYSE:MAS)

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

Earnings & Valuation

This table compares Masco and James Hardie Industries”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Masco	$7.83 billion	1.70	$822.00 million	$3.90	16.39
James Hardie Industries	$4.12 billion	2.15	$424.00 million	$0.48	42.91

Masco has higher revenue and earnings than James Hardie Industries. Masco 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 Ratings

This is a breakdown of current ratings and recommmendations for Masco and James Hardie Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Masco	0	14	5	1	2.35
James Hardie Industries	0	3	11	2	2.94

Masco presently has a consensus target price of $73.20, indicating a potential upside of 14.51%. James Hardie Industries has a consensus target price of $25.93, indicating a potential upside of 25.89%. Given James Hardie Industries’ stronger consensus rating and higher possible upside, analysts plainly believe James Hardie Industries is more favorable than Masco.

Insider and Institutional Ownership

93.9% of Masco shares are owned by institutional investors. Comparatively, 8.0% of James Hardie Industries shares are owned by institutional investors. 0.5% of Masco shares are owned 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.

Risk and Volatility

Masco has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500. Comparatively, James Hardie Industries has a beta of 1.8, meaning that its stock price is 80% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Masco	10.89%	1,317.38%	16.47%
James Hardie Industries	4.67%	18.40%	7.62%

Dividends

Masco pays an annual dividend of $1.24 per share and has a dividend yield of 1.9%. James Hardie Industries pays an annual dividend of $0.21 per share and has a dividend yield of 1.0%. Masco pays out 31.8% of its earnings in the form of a dividend. James Hardie Industries pays out 43.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Masco has raised its dividend for 12 consecutive years. Masco is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Masco beats James Hardie Industries on 11 of the 18 factors compared between the two stocks.

About Masco

Masco Corporation designs, manufactures, and distributes home improvement and building products in North America, Europe, and internationally. The company's Plumbing Products segment offers faucets, showerheads, handheld showers, valves, bath hardware and accessories, bathing units, shower bases and enclosures, sinks, toilets, acrylic tubs, shower trays, spas, exercise pools, and fitness systems; brass, copper, and composite plumbing system components; connected water products; thermoplastic solutions, extruded plastic profiles, specialized fabrications, and PEX tubing products; and other non-decorative plumbing products. This segment provides its products under the DELTA, BRIZO, PEERLESS, HANSGROHE, AXOR, KRAUS, EASY DRAIN, STEAMIST, ELITESTEAM, GINGER, NEWPORT BRASS, BRASSTECH, WALTEC, BRISTAN, HERITAGE, MIROLIN, HOT SPRING, CALDERA, FREEFLOW SPAS, FANTASY SPAS, ENDLESS POOLS, BRASSCRAFT, PLUMB SHOP, COBRA, COBRA PRO, and MASTER PLUMBER brands. Its Decorative Architectural Products segment offers paints, primers, specialty coatings, stains, and waterproofing products, as well as paint applicators and accessories; cabinet and door hardware, functional hardware, wall plates, hook and rail products, closet organization systems, and picture hanging accessories; decorative bath hardware, mirrors, and shower accessories and doors; and decorative indoor and outdoor lighting fixtures, ceiling fans, landscape lighting, and LED lighting systems. This segment provides its products under the BEHR, KILZ, WHIZZ, Elder & Jenks, LIBERTY, BRAINERD, FRANKLIN BRASS, KICHLER, and ÉLAN brands. It sells its products to the plumbing, heating, and hardware wholesalers; home centers and online retailers; hardware stores; electrical and landscape distributors; lighting showrooms; building supply outlets; and other mass merchandisers. Masco Corporation was incorporated in 1929 and is headquartered in Livonia, Michigan.

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.