Tredegar (NYSE:TG) and Quanex Building Products (NYSE:NX) are both small-cap basic materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.
This table compares Tredegar and Quanex Building Products’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Quanex Building Products||3.48%||6.67%||3.65%|
Tredegar pays an annual dividend of $0.44 per share and has a dividend yield of 2.6%. Quanex Building Products pays an annual dividend of $0.32 per share and has a dividend yield of 2.0%. Quanex Building Products pays out 41.6% of its earnings in the form of a dividend.
This is a summary of recent ratings and target prices for Tredegar and Quanex Building Products, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Quanex Building Products||0||2||0||0||2.00|
Quanex Building Products has a consensus price target of $25.00, indicating a potential upside of 58.33%. Given Quanex Building Products’ higher possible upside, analysts clearly believe Quanex Building Products is more favorable than Tredegar.
Earnings & Valuation
This table compares Tredegar and Quanex Building Products’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Tredegar||$961.33 million||0.58||$38.25 million||N/A||N/A|
|Quanex Building Products||$866.55 million||0.64||$18.68 million||$0.77||20.51|
Tredegar has higher revenue and earnings than Quanex Building Products.
Insider and Institutional Ownership
65.3% of Tredegar shares are owned by institutional investors. 12.6% of Tredegar shares are owned by company insiders. Comparatively, 5.3% of Quanex Building Products shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Volatility and Risk
Tredegar has a beta of 1.23, meaning that its stock price is 23% more volatile than the S&P 500. Comparatively, Quanex Building Products has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500.
Tredegar beats Quanex Building Products on 9 of the 13 factors compared between the two stocks.
Tredegar Corporation, through its subsidiaries, manufactures and sells polyethylene (PE) plastic films, polyester films, and aluminum extrusions worldwide. It operates through PE Films, Flexible Packaging Films, and Aluminum Extrusions segments. The PE Films segment offers personal care materials, such as apertured films and laminate materials for use in feminine hygiene products, baby diapers, and adult incontinence products under the ComfortAire, ComfortFeel, and FreshFeel brands; elastic materials for use as components for baby diapers, adult incontinence products, and feminine hygiene products under the ExtraFlex and FlexAire brands; and three-dimensional apertured film transfer layers for baby diapers and adult incontinence products under the AquiDry and AquiDry Plus brands. This segment also provides thin-gauge films for bathroom tissue and paper towels; polypropylene films for industrial applications, such as tape and automotive protection; single- and multi-layer surface protection films for protecting components of flat panel displays used in televisions, monitors, notebooks, smart phones, tablets, e-readers, and digital signage under the UltraMask, ForceField, and ForceField PEARL brands; and specialty film-based components for a range of LED illumination applications. The Flexible Packaging Films segment offers polyester-based films for food packaging and industrial applications under the Terphane and Sealphane brands. The Aluminum Extrusions segment produces soft-alloy and medium-strength aluminum extrusions primarily for building and construction, automotive, consumer durables, machinery and equipment, electrical, and distribution markets; and manufactures mill, anodized, and painted and fabricated aluminum extrusions to fabricators and distributors. Tredegar Corporation was founded in 1988 and is headquartered in Richmond, Virginia.
About Quanex Building Products
Quanex Building Products Corporation, together with its subsidiaries, provides components for the fenestration industry worldwide. It operates through three segments: North American Engineered Components, European Engineered Components, and North American Cabinet Components. The company offers flexible insulating glass spacers; extruded vinyl profiles; window and door screens; cabinet doors and other components for original equipment manufacturers (OEMs) in the kitchen and bathroom cabinet industry; and precision-formed metal and wood products, as well as solar panel sealants, trim moldings, vinyl decking and fencing products, water retention barriers, and conservatory roof components. It sells its products to OEMs in the building products industry through sales representatives, direct sales force, distributors, and independent sales agents. The company is headquartered in Houston, Texas.
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