Summit Materials (SUM) versus USG Corporation (USG) Critical Analysis
Summit Materials (NYSE: SUM) and USG Corporation (NYSE:USG) are both mid-cap construction companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.
This is a summary of recent recommendations and price targets for Summit Materials and USG Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Summit Materials presently has a consensus price target of $30.33, indicating a potential downside of 1.99%. USG Corporation has a consensus price target of $30.25, indicating a potential downside of 3.11%. Given Summit Materials’ stronger consensus rating and higher possible upside, equities analysts plainly believe Summit Materials is more favorable than USG Corporation.
This table compares Summit Materials and USG Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Risk & Volatility
Summit Materials has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500. Comparatively, USG Corporation has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.
Institutional and Insider Ownership
87.0% of USG Corporation shares are owned by institutional investors. 2.0% of Summit Materials shares are owned by company insiders. Comparatively, 0.7% of USG Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Summit Materials and USG Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Summit Materials||$1.76 billion||1.89||$368.45 million||$0.56||55.00|
|USG Corporation||$3.08 billion||1.45||$487.00 million||$3.10||10.07|
USG Corporation has higher revenue and earnings than Summit Materials. USG Corporation is trading at a lower price-to-earnings ratio than Summit Materials, indicating that it is currently the more affordable of the two stocks.
Summit Materials Company Profile
Summit Materials, Inc. is a construction materials company. The Company operates through three segments: West, East and Cement. As of December 31, 2016, the Company had operations in 21 states in the United States and in British Columbia, Canada. The Company’s materials include aggregates, which it supplies across the United States, and in British Columbia, Canada, and cement, which it supplies along the Mississippi River from Minneapolis to New Orleans. Within its markets, it offers construction materials and related downstream products through its vertical integration. In addition to supplying of aggregates to its customers, the Company also uses its materials internally to produce ready-mix concrete and asphalt paving mix. Its construction materials operations consists of aggregates production, including crushed stone and construction sand and gravel, cement and ready-mixed concrete production, and asphalt paving mix production.
USG Corporation Company Profile
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.
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