Critical Analysis: Louisiana-Pacific Corporation (LPX) versus Universal Forest Products (UFPI)

Louisiana-Pacific Corporation (NYSE: LPX) and Universal Forest Products (NASDAQ:UFPI) are both mid-cap construction companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, dividends and risk.

Institutional and Insider Ownership

91.4% of Louisiana-Pacific Corporation shares are owned by institutional investors. Comparatively, 78.1% of Universal Forest Products shares are owned by institutional investors. 1.5% of Louisiana-Pacific Corporation shares are owned by insiders. Comparatively, 3.4% of Universal Forest Products shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Louisiana-Pacific Corporation has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, Universal Forest Products has a beta of 1.84, suggesting that its share price is 84% more volatile than the S&P 500.

Valuation & Earnings

This table compares Louisiana-Pacific Corporation and Universal Forest Products’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Louisiana-Pacific Corporation $2.45 billion 1.59 $443.50 million $1.77 15.19
Universal Forest Products $3.83 billion 0.59 $227.60 million $5.33 20.59

Louisiana-Pacific Corporation has higher revenue, but lower earnings than Universal Forest Products. Louisiana-Pacific Corporation is trading at a lower price-to-earnings ratio than Universal Forest Products, indicating that it is currently the more affordable of the two stocks.

Dividends

Universal Forest Products pays an annual dividend of $0.90 per share and has a dividend yield of 0.8%. Louisiana-Pacific Corporation does not pay a dividend. Universal Forest Products pays out 16.9% of its earnings in the form of a dividend.

Profitability

This table compares Louisiana-Pacific Corporation and Universal Forest Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Louisiana-Pacific Corporation 10.50% 17.13% 9.74%
Universal Forest Products 2.85% 12.05% 7.61%

Analyst Ratings

This is a summary of current ratings and target prices for Louisiana-Pacific Corporation and Universal Forest Products, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Louisiana-Pacific Corporation 2 6 1 0 1.89
Universal Forest Products 0 1 1 0 2.50

Louisiana-Pacific Corporation currently has a consensus price target of $29.00, indicating a potential upside of 7.89%. Universal Forest Products has a consensus price target of $110.00, indicating a potential upside of 0.25%. Given Louisiana-Pacific Corporation’s higher possible upside, research analysts plainly believe Louisiana-Pacific Corporation is more favorable than Universal Forest Products.

Summary

Louisiana-Pacific Corporation beats Universal Forest Products on 8 of the 15 factors compared between the two stocks.

Louisiana-Pacific Corporation Company Profile

Louisiana-Pacific Corporation is a manufacturer of building products. The Company’s products are used in home construction, repair and remodeling, and outdoor structures. The Company operates in four segments, which include North America Oriented Strand Board (OSB), Siding, Engineered Wood Products (EWP) and South America. The OSB segment manufactures and distributes OSB structural panel products. The Siding segment offers two categories of products, which include SmartSide siding products and related accessories, and CanExel siding and accessories and other related products. The Engineered Wood Products (EWP) segment manufactures and distributes laminated veneer lumber, I-Joists, laminated strand lumber and other related products. The South American segment manufactures and distributes OSB and siding products in South America and certain export markets. Its engineered I-joists are used in residential and commercial flooring, and roofing systems and other structural applications.

Universal Forest Products Company Profile

Universal Forest Products, Inc. is a holding company. The Company, through its subsidiaries, supplies wood, wood composite and other products to three primary markets, such as retail, construction and industrial. Its segments include North, South, West, Alternative Materials, International, idX Holdings, Inc. (idX) and Corporate divisions. idX is a designer, manufacturer and installer of in-store environments. It designs, manufactures and markets wood and wood-alternative products for national home centers and other retailers; structural lumber and other products for the manufactured housing industry; engineered wood components for residential and commercial construction; specialty wood packaging, components and packing materials for various industries, and customized interior fixtures used in a range of retail stores, commercial and other structures. Its customers comprising retail market are national home center retailers and retail-oriented regional lumberyards, among others.

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