Head-To-Head Contrast: Granite Construction (GVA) versus NCI Building Systems (NCS)

Granite Construction (NYSE: GVA) and NCI Building Systems (NYSE:NCS) are both construction companies, but which is the superior stock? We will contrast the two businesses based on the strength of their profitability, dividends, analyst recommendations, earnings, institutional ownership, risk and valuation.

Dividends

Granite Construction pays an annual dividend of $0.52 per share and has a dividend yield of 0.8%. NCI Building Systems does not pay a dividend. Granite Construction pays out 40.3% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Granite Construction and NCI Building Systems’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Granite Construction $2.70 billion 0.93 $126.96 million $1.29 48.95
NCI Building Systems $1.76 billion 0.63 $147.14 million $0.79 19.68

NCI Building Systems has higher revenue, but lower earnings than Granite Construction. NCI Building Systems is trading at a lower price-to-earnings ratio than Granite Construction, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for Granite Construction and NCI Building Systems, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Granite Construction 0 2 6 0 2.75
NCI Building Systems 0 0 3 0 3.00

Granite Construction currently has a consensus price target of $65.71, suggesting a potential upside of 4.06%. NCI Building Systems has a consensus price target of $17.33, suggesting a potential upside of 11.47%. Given NCI Building Systems’ stronger consensus rating and higher probable upside, analysts plainly believe NCI Building Systems is more favorable than Granite Construction.

Risk & Volatility

Granite Construction has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500. Comparatively, NCI Building Systems has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500.

Profitability

This table compares Granite Construction and NCI Building Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Granite Construction 1.84% 5.71% 2.93%
NCI Building Systems 3.18% 18.31% 5.31%

Institutional & Insider Ownership

98.9% of Granite Construction shares are held by institutional investors. Comparatively, 93.9% of NCI Building Systems shares are held by institutional investors. 1.3% of Granite Construction shares are held by company insiders. Comparatively, 1.8% of NCI Building Systems shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

NCI Building Systems beats Granite Construction on 9 of the 16 factors compared between the two stocks.

Granite Construction Company Profile

Granite Construction Incorporated is a heavy civil contractor and construction materials producer in the United States. The Company operates through three segments: Construction, Large Project Construction and Construction Materials. The Company operates across the nation, serving both public and private sector clients. Within the public sector, it concentrates on heavy-civil infrastructure projects, including the construction of streets, roads, highways, mass transit facilities, airport infrastructure, bridges, trenchless and underground utilities, power-related facilities, water and wastewater facilities, utilities, tunnels, dams and other infrastructure-related projects. Within the private sector, the Company offers site preparation and infrastructure services for residential development, energy development, commercial and industrial sites, and other facilities, as well as provides construction management professional services.

NCI Building Systems Company Profile

NCI Building Systems, Inc. is a manufacturer and marketer of metal products in North America. The Company’s operating segments include Engineered building systems, Metal components and Metal coil coating. The Engineered building systems segment is engaged in the manufacturing of main frames and long bay systems, and engineering and drafting. The Metal components segment’s products include metal roof and wall panels, doors, metal partitions, metal trim, insulated metal panel (IMP) products and other related accessories. The Company manufactures and distributes a range of metal products for the non-residential construction market. It operates in the United States, Mexico, Canada and China. The Company provides metal coil coating services, and designs, engineers, manufactures and markets metal components and engineered building systems. It also provides metal coil coating services for commercial and construction applications, servicing both internal and external customers.

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