Gibraltar Industries (NASDAQ: ROCK) and Carpenter Technology Corporation (NYSE:CRS) are both small-cap construction companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, earnings, risk and institutional ownership.

Insider & Institutional Ownership

92.8% of Carpenter Technology Corporation shares are held by institutional investors. 0.5% of Gibraltar Industries shares are held by insiders. Comparatively, 3.6% of Carpenter Technology Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Gibraltar Industries and Carpenter Technology Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gibraltar Industries 2.38% 10.14% 5.09%
Carpenter Technology Corporation 2.61% 4.48% 1.83%

Dividends

Carpenter Technology Corporation pays an annual dividend of $0.72 per share and has a dividend yield of 1.7%. Gibraltar Industries does not pay a dividend. Carpenter Technology Corporation pays out 72.0% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of recent ratings for Gibraltar Industries and Carpenter Technology Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gibraltar Industries 0 0 2 0 3.00
Carpenter Technology Corporation 0 2 3 0 2.60

Gibraltar Industries presently has a consensus price target of $34.50, suggesting a potential upside of 18.97%. Carpenter Technology Corporation has a consensus price target of $43.40, suggesting a potential upside of 2.75%. Given Gibraltar Industries’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Gibraltar Industries is more favorable than Carpenter Technology Corporation.

Risk and Volatility

Gibraltar Industries has a beta of 1.81, indicating that its share price is 81% more volatile than the S&P 500. Comparatively, Carpenter Technology Corporation has a beta of 2.09, indicating that its share price is 109% more volatile than the S&P 500.

Valuation and Earnings

This table compares Gibraltar Industries and Carpenter Technology Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gibraltar Industries $958.80 million 0.96 $109.22 million $0.71 40.85
Carpenter Technology Corporation $1.80 billion 1.10 $213.50 million $1.00 42.24

Carpenter Technology Corporation has higher revenue and earnings than Gibraltar Industries. Gibraltar Industries is trading at a lower price-to-earnings ratio than Carpenter Technology Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Carpenter Technology Corporation beats Gibraltar Industries on 11 of the 16 factors compared between the two stocks.

Gibraltar Industries Company Profile

Gibraltar Industries, Inc. is a manufacturer and distributor of building products for industrial, transportation infrastructure, residential housing, renewable energy and resource conservation markets. The Company’s segments include Residential Products; Industrial and Infrastructure Products, and Renewable Energy and Conservation. The Residential Products segment services residential housing construction and residential repair and remodeling activity with products including roof and foundation ventilation products, rain dispersion products and roof ventilation accessories. The Industrial and Infrastructure Products segment focuses on a range of markets, including industrial and commercial construction, automotive, airports and energy and power generation markets with products. The Renewable Energy and Conservation segment focuses on the design, engineering, manufacturing and installation of solar racking systems and commercial, institutional and retail greenhouse structures.

Carpenter Technology Corporation Company Profile

Carpenter Technology Corporation is engaged in the manufacturing, fabrication and distribution of specialty metals. The Company’s segments include Specialty Alloys Operations (SAO) and Performance Engineered Products (PEP). Its SAO segment consists of alloy and stainless steel manufacturing operations. Its PEP segment includes the Dynamet titanium business, the Carpenter Powder Products business, the Amega West business, the Specialty Steel Supply business and the Latrobe and Mexico distribution businesses. It develops, manufactures and distributes cast/wrought and powder metal stainless steels, and special alloys, including high temperature (iron-nickel-cobalt base), stainless, corrosion resistant, controlled expansion alloys, ultra-high strength and implantable alloys, tool and die steels and other specialty metals, as well as cast/wrought titanium alloys. The Company manufactures and rents down-hole drilling tools and components used in the oil and gas industry.

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