Universal Forest Products (NASDAQ: UFPI) and Louisiana-Pacific Corporation (NYSE:LPX) are both mid-cap construction companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, earnings, analyst recommendations, institutional ownership and valuation.
Valuation and Earnings
This table compares Universal Forest Products and Louisiana-Pacific Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Universal Forest Products||$3.24 billion||0.71||$101.17 million||$5.33||21.18|
|Louisiana-Pacific Corporation||$2.23 billion||1.77||$149.80 million||$1.77||15.42|
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.
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.
Insider and Institutional Ownership
78.2% of Universal Forest Products shares are held by institutional investors. Comparatively, 91.8% of Louisiana-Pacific Corporation shares are held by institutional investors. 3.4% of Universal Forest Products shares are held by company insiders. Comparatively, 1.5% of Louisiana-Pacific Corporation 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.
This is a summary of current ratings and price targets for Universal Forest Products and Louisiana-Pacific Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Universal Forest Products||0||1||1||0||2.50|
Universal Forest Products presently has a consensus target price of $110.00, suggesting a potential downside of 2.56%. Louisiana-Pacific Corporation has a consensus target price of $29.00, suggesting a potential upside of 6.27%. Given Louisiana-Pacific Corporation’s higher possible upside, analysts clearly believe Louisiana-Pacific Corporation is more favorable than Universal Forest Products.
Volatility and Risk
Universal Forest Products has a beta of 1.84, indicating that its share price is 84% more volatile than the S&P 500. Comparatively, Louisiana-Pacific Corporation has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500.
This table compares Universal Forest Products and Louisiana-Pacific Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Universal Forest Products||2.85%||12.05%||7.61%|
Louisiana-Pacific Corporation beats Universal Forest Products on 8 of the 15 factors compared between the two stocks.
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.
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.
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