USG Corporation (NYSE: USG) and Smart Sand (NYSE:SND) are both construction companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and price targets for USG Corporation and Smart Sand, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
USG Corporation 2 10 5 0 2.18
Smart Sand 0 3 7 0 2.70

USG Corporation currently has a consensus target price of $30.93, indicating a potential upside of 15.66%. Smart Sand has a consensus target price of $15.53, indicating a potential upside of 180.28%. Given Smart Sand’s stronger consensus rating and higher probable upside, analysts clearly believe Smart Sand is more favorable than USG Corporation.

Earnings & Valuation

This table compares USG Corporation and Smart Sand’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
USG Corporation $3.08 billion 1.25 $487.00 million $3.10 8.63
Smart Sand $95.23 million 2.35 $29.85 million N/A N/A

USG Corporation has higher revenue and earnings than Smart Sand.

Profitability

This table compares USG Corporation and Smart Sand’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
USG Corporation 14.94% 13.57% 6.20%
Smart Sand 8.81% 6.22% 5.19%

Institutional and Insider Ownership

89.3% of USG Corporation shares are held by institutional investors. 0.7% of USG Corporation shares are held 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.

Summary

USG Corporation beats Smart Sand on 8 of the 12 factors compared between the two stocks.

About USG Corporation

USG Corporation, through its subsidiaries, is a manufacturer and distributor of building materials. The Company’s segments include Gypsum, Ceilings and USG Boral Building Products (UBBP). It produces a range of products for use in new residential, new nonresidential, and residential and nonresidential repair and remodel construction, as well as products used in certain industrial processes. Its products are distributed through building materials dealers, home improvement centers and other retailers, specialty wallboard distributors, and contractors. Gypsum segment manufactures and markets gypsum and related products in the United States, Canada, Mexico and Latin America. Ceilings segment manufactures and markets interior systems products in the United States, Canada, Mexico and Latin America. The UBBP segment manufactures, distributes and sells certain building products, mines raw gypsum and sells natural and synthetic gypsum throughout Asia, Australasia and the Middle East.

About Smart Sand

Smart Sand, Inc. is a producer of Northern White raw frac sand, which is a proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells. The Company sells its products primarily to oil and natural gas exploration and production companies and oilfield service companies under a combination of long-term take-or-pay contracts and spot sales in the open market. It owns and operates a raw frac sand mine and related processing facility near Oakdale, Wisconsin. In addition to the Oakdale facility, it owns a second property in Jackson County, Wisconsin, known as Hixton site. Its sand reserves include a balanced concentration of coarse (20/40, 30/50 and 40/70 gradation) sands and fine (60/140 gradation) sand. Its reserves contain deposits of approximately 20% of 20/40 and coarser substrate, over 40% of 40/70 mesh substrate and approximately 40% of 100-mesh substrate. Its 30/50 gradation is a derivative of the 20/40 and 40/70 blends.

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