Construction Partners (NASDAQ:ROAD – Get Free Report) and Quanex Building Products (NYSE:NX – Get Free Report) are both construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, analyst recommendations, dividends, earnings and institutional ownership.
Insider and Institutional Ownership
94.8% of Construction Partners shares are owned by institutional investors. Comparatively, 97.5% of Quanex Building Products shares are owned by institutional investors. 15.7% of Construction Partners shares are owned by company insiders. Comparatively, 1.9% of Quanex Building Products shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Risk & Volatility
Construction Partners has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, Quanex Building Products has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Construction Partners | 3.99% | 15.26% | 4.40% |
| Quanex Building Products | -13.00% | 12.24% | 4.73% |
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Construction Partners and Quanex Building Products, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Construction Partners | 0 | 2 | 3 | 2 | 3.00 |
| Quanex Building Products | 1 | 1 | 1 | 0 | 2.00 |
Construction Partners presently has a consensus target price of $131.40, suggesting a potential upside of 14.35%. Quanex Building Products has a consensus target price of $28.00, suggesting a potential upside of 43.59%. Given Quanex Building Products’ higher possible upside, analysts plainly believe Quanex Building Products is more favorable than Construction Partners.
Earnings & Valuation
This table compares Construction Partners and Quanex Building Products”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Construction Partners | $2.81 billion | 2.31 | $101.78 million | $2.20 | 52.23 |
| Quanex Building Products | $1.84 billion | 0.49 | -$250.81 million | ($5.26) | -3.71 |
Construction Partners has higher revenue and earnings than Quanex Building Products. Quanex Building Products is trading at a lower price-to-earnings ratio than Construction Partners, indicating that it is currently the more affordable of the two stocks.
Summary
Construction Partners beats Quanex Building Products on 11 of the 15 factors compared between the two stocks.
About Construction Partners
Construction Partners, Inc., a civil infrastructure company, constructs and maintains roadways in Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee. The company provides various products and services to public and private infrastructure projects, such as highways, roads, bridges, airports, and commercial and residential developments. It also engages in manufacturing and distributing hot mix asphalt (HMA) for internal use and sales to third parties in connection with construction projects; and paving activities, including the construction of roadway base layers and application of asphalt pavement. In addition, the company is involved in site development, including the installation of utility and drainage systems; mining aggregates, such as sand, gravel, and construction stones that are used as raw materials in the production of HMA; and distributing liquid asphalt cement for internal use and sales to third parties in connection with HMA production. The company was formerly known as SunTx CPI Growth Company, Inc. and changed its name to Construction Partners, Inc. in September 2017. Construction Partners, Inc. was founded in 2007 and is headquartered in Dothan, Alabama.
About Quanex Building Products
Quanex Building Products Corporation, together with its subsidiaries, provides components for the fenestration industry in the United States, rest of Europe, Canada, Asia, the United Kingdom, and internationally. The company operates through three segments: North American Fenestration, European Fenestration, and North American Cabinet Components. It offers flexible insulating glass spacers, extruded vinyl profiles, window and door screens, and precision-formed metal and wood products, as well as cabinet doors and other components for original equipment manufacturers (OEMs) in the kitchen and bathroom cabinet industry. In addition, the company provides various non-fenestration components and products, including solar panel sealants, trim moldings, vinyl decking, fencing, water retention barriers, and conservatory roof components. It sells its products to OEMs in the building products industry through sales representatives, direct sales force, distributors, and independent sales agents. Quanex Building Products Corporation was founded in 1927 and is based in Houston, Texas.
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