Analyzing Continental Building Products (CBPX) and Valmont Industries (VMI)

Valmont Industries (NYSE: VMI) and Continental Building Products (NYSE:CBPX) are both industrial products companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, profitability, earnings and valuation.

Profitability

This table compares Valmont Industries and Continental Building Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Valmont Industries 6.94% 14.89% 6.29%
Continental Building Products 9.16% 15.45% 7.55%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Valmont Industries and Continental Building Products, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valmont Industries 0 1 2 0 2.67
Continental Building Products 0 2 1 0 2.33

Valmont Industries currently has a consensus price target of $171.00, indicating a potential upside of 15.19%. Continental Building Products has a consensus price target of $26.50, indicating a potential upside of 20.45%. Given Continental Building Products’ higher possible upside, analysts clearly believe Continental Building Products is more favorable than Valmont Industries.

Dividends

Valmont Industries pays an annual dividend of $1.50 per share and has a dividend yield of 1.0%. Continental Building Products does not pay a dividend. Valmont Industries pays out 18.6% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Valmont Industries and Continental Building Products’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Valmont Industries $2.64 billion 1.27 $344.67 million $8.07 18.40
Continental Building Products $474.02 million 1.82 $131.29 million $1.09 20.18

Valmont Industries has higher revenue and earnings than Continental Building Products. Valmont Industries is trading at a lower price-to-earnings ratio than Continental Building Products, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

85.0% of Valmont Industries shares are held by institutional investors. Comparatively, 95.6% of Continental Building Products shares are held by institutional investors. 3.3% of Valmont Industries shares are held by company insiders. Comparatively, 0.3% of Continental Building Products shares are held 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.

Volatility and Risk

Valmont Industries has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500. Comparatively, Continental Building Products has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500.

Summary

Continental Building Products beats Valmont Industries on 9 of the 16 factors compared between the two stocks.

About Valmont Industries

Valmont Industries, Inc. is a producer of fabricated metal products, and steel, aluminum and composite pole, tower and other structures, and mechanized irrigation systems. The Company’s segments are Engineered Support Structures (ESS); Utility Support Structures; Energy and Mining; Coatings; Irrigation, and Other. The ESS segment manufactures steel, aluminum, and composite poles and structures. The Utility Support Structures Segment manufactures steel and concrete pole structures for electrical transmission, substation and distribution applications. The Energy and Mining Segment produces access systems, which are engineered structures and components that allow people to move safely in an industrial, infrastructure or commercial facility. The Coatings Segment consists of galvanizing, anodizing and powder coating services on a global basis. The Irrigation Segment manufactures and distributes mechanical irrigation equipment and related service parts under the Valley brand name.

About Continental Building Products

Continental Building Products, Inc. is a manufacturer of gypsum wallboard and complementary finishing products. The Company operates through wallboard segment. Gypsum wallboard is a primary building material used in residential and commercial construction and in repair and remodel (R&R). It offers customers a range of gypsum wallboard products, including LiftLite, its lightweight product designed to lift and install; its Mold Defense line of products designed for protection against mold and mildew, and its Weather Defense line of moisture and mold-resistant exterior sheathing. The Company also operates a finishing products business that manufactures a line of joint compounds at its plant in Silver Grove (Kentucky) and its joint compound plant in Chambly (Quebec). The Company manufactures gypsum wallboard related products for commercial and residential buildings and houses. The Company’s manufacturing facilities are concentrated in the eastern United States and eastern Canada.

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