Summit Materials (SUM) and GCP Applied Technologies (GCP) Financial Analysis

GCP Applied Technologies (NYSE: GCP) and Summit Materials (NYSE:SUM) are both mid-cap construction companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, risk, valuation, profitability, institutional ownership and dividends.

Analyst Ratings

This is a summary of recent recommendations and price targets for GCP Applied Technologies and Summit Materials, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GCP Applied Technologies 0 0 4 0 3.00
Summit Materials 0 2 6 0 2.75

GCP Applied Technologies currently has a consensus price target of $35.50, indicating a potential upside of 22.63%. Summit Materials has a consensus price target of $30.33, indicating a potential upside of 9.00%. Given GCP Applied Technologies’ stronger consensus rating and higher possible upside, equities research analysts plainly believe GCP Applied Technologies is more favorable than Summit Materials.

Volatility and Risk

GCP Applied Technologies has a beta of 0.76, suggesting that its stock price is 24% less volatile than the S&P 500. Comparatively, Summit Materials has a beta of 2.06, suggesting that its stock price is 106% more volatile than the S&P 500.

Valuation & Earnings

This table compares GCP Applied Technologies and Summit Materials’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
GCP Applied Technologies $1.35 billion 1.54 $209.90 million $0.04 723.75
Summit Materials $1.76 billion 1.70 $368.45 million $0.56 49.45

Summit Materials has higher revenue and earnings than GCP Applied Technologies. Summit Materials is trading at a lower price-to-earnings ratio than GCP Applied Technologies, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

82.2% of GCP Applied Technologies shares are held by institutional investors. 0.7% of GCP Applied Technologies shares are held by company insiders. Comparatively, 2.0% of Summit Materials shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares GCP Applied Technologies and Summit Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GCP Applied Technologies 0.26% -44.32% 5.24%
Summit Materials 2.46% 9.90% 3.22%

Summary

Summit Materials beats GCP Applied Technologies on 10 of the 14 factors compared between the two stocks.

GCP Applied Technologies Company Profile

GCP Applied Technologies Inc. produces and sells specialty construction chemicals, specialty building materials, and packaging sealants and coatings. The Company operates through two segments: Specialty Construction Chemicals and Specialty Building Materials. The Specialty Construction Chemicals segment manufactures and markets products to manage performance of Portland cement, and materials based on Portland cement, such as concrete admixtures and cement additives, as well as concrete production management systems. The Specialty Building Materials segment manufactures and markets building envelope products, residential building products and specialty construction products. Its brands include ADVA, CBA, MIRA, ADPRUFE, DARABLEND and APPERTA.

Summit Materials Company Profile

Summit Materials, Inc. is a construction materials company. The Company operates through three segments: West, East and Cement. As of December 31, 2016, the Company had operations in 21 states in the United States and in British Columbia, Canada. The Company’s materials include aggregates, which it supplies across the United States, and in British Columbia, Canada, and cement, which it supplies along the Mississippi River from Minneapolis to New Orleans. Within its markets, it offers construction materials and related downstream products through its vertical integration. In addition to supplying of aggregates to its customers, the Company also uses its materials internally to produce ready-mix concrete and asphalt paving mix. Its construction materials operations consists of aggregates production, including crushed stone and construction sand and gravel, cement and ready-mixed concrete production, and asphalt paving mix production.

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