TopBuild Corp. (NYSE: BLD) and Installed Building Products (NYSE:IBP) are both mid-cap construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.
Insider and Institutional Ownership
91.7% of TopBuild Corp. shares are owned by institutional investors. Comparatively, 64.8% of Installed Building Products shares are owned by institutional investors. 1.3% of TopBuild Corp. shares are owned by insiders. Comparatively, 32.9% of Installed Building Products shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This is a breakdown of current recommendations for TopBuild Corp. and Installed Building Products, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Installed Building Products||0||1||5||0||2.83|
TopBuild Corp. currently has a consensus target price of $56.20, suggesting a potential downside of 12.12%. Installed Building Products has a consensus target price of $66.00, suggesting a potential upside of 1.38%. Given Installed Building Products’ stronger consensus rating and higher possible upside, analysts plainly believe Installed Building Products is more favorable than TopBuild Corp..
This table compares TopBuild Corp. and Installed Building Products’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Installed Building Products||3.88%||24.34%||7.02%|
Risk & Volatility
TopBuild Corp. has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Installed Building Products has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.
Valuation and Earnings
This table compares TopBuild Corp. and Installed Building Products’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|TopBuild Corp.||$1.74 billion||1.36||$72.60 million||$1.80||35.53|
|Installed Building Products||$862.98 million||2.40||$38.43 million||$1.31||49.70|
TopBuild Corp. has higher revenue and earnings than Installed Building Products. TopBuild Corp. is trading at a lower price-to-earnings ratio than Installed Building Products, indicating that it is currently the more affordable of the two stocks.
Installed Building Products beats TopBuild Corp. on 10 of the 14 factors compared between the two stocks.
TopBuild Corp. Company Profile
TopBuild Corp. installs and distributes insulation products to the United States construction industry. The Company operates through two segments: Installation (TruTeam) and Distribution (Service Partners). Its Installation segment principally includes the sales and installation of insulation and other building products. Its Distribution segment includes the distribution of insulation and other building products. As of December 31, 2016, the Company provided insulation installation services through its TruTeam contractor services business, which had over 175 installation branches located in 41 states. It installs various insulation applications, which include fiberglass batts and rolls and blown-in loose fill fiberglass. As of December 31, 2016, the Company distributed insulation and other building products, including rain gutters, fireplaces, closet shelving, and roofing materials through its Service Partners business, which had over 70 distribution centers located in 33 states.
Installed Building Products Company Profile
Installed Building Products, Inc. is a holding company. The Company is a residential insulation installer in the United States. As of December 31, 2016, the Company’s national platform included over 100 locations accessing customers in 48 continental states and the District of Columbia. The Company also installs complementary building products, including garage doors, rain gutters, shower doors, closet shelving and mirrors, which provides cross-selling opportunities to supplement the insulation installation business. The Company manages various aspects of the installation process for the customers, from the direct purchase and receipt of materials from national manufacturers, to supply of materials to job sites and quality installation. The Company’s customers include production and custom homebuilders, multi-family and commercial contractors, and homeowners.
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