Reviewing Installed Building Products (IBP) and Masco Corporation (MAS)
Installed Building Products (NYSE: IBP) and Masco Corporation (NYSE:MAS) are both construction companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.
Insider and Institutional Ownership
65.6% of Installed Building Products shares are owned by institutional investors. Comparatively, 88.4% of Masco Corporation shares are owned by institutional investors. 32.9% of Installed Building Products shares are owned by insiders. Comparatively, 1.3% of Masco Corporation shares are owned by 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.
Risk and Volatility
Installed Building Products has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, Masco Corporation has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500.
Earnings and Valuation
This table compares Installed Building Products and Masco Corporation’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Installed Building Products||$997.23 million||1.90||$121.83 million||$1.30||45.96|
|Masco Corporation||$7.47 billion||1.58||$1.23 billion||$1.62||23.16|
Masco Corporation has higher revenue and earnings than Installed Building Products. Masco Corporation is trading at a lower price-to-earnings ratio than Installed Building Products, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings for Installed Building Products and Masco Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Installed Building Products||0||0||4||0||3.00|
Installed Building Products presently has a consensus price target of $63.25, suggesting a potential upside of 5.86%. Masco Corporation has a consensus price target of $40.77, suggesting a potential upside of 8.66%. Given Masco Corporation’s higher possible upside, analysts clearly believe Masco Corporation is more favorable than Installed Building Products.
Masco Corporation pays an annual dividend of $0.40 per share and has a dividend yield of 1.1%. Installed Building Products does not pay a dividend. Masco Corporation pays out 24.7% of its earnings in the form of a dividend. Masco Corporation has raised its dividend for 3 consecutive years.
This table compares Installed Building Products and Masco Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Installed Building Products||4.11%||25.27%||7.46%|
Masco Corporation beats Installed Building Products on 12 of the 17 factors compared between the two stocks.
About Installed Building Products
Installed Building Products, Inc. is a holding company. The Company is a residential insulation installer in the United States. As of December 31, 2016, the Company’s national platform included over 100 locations accessing customers in 48 continental states and the District of Columbia. The Company also installs complementary building products, including garage doors, rain gutters, shower doors, closet shelving and mirrors, which provides cross-selling opportunities to supplement the insulation installation business. The Company manages various aspects of the installation process for the customers, from the direct purchase and receipt of materials from national manufacturers, to supply of materials to job sites and quality installation. The Company’s customers include production and custom homebuilders, multi-family and commercial contractors, and homeowners.
About Masco Corporation
Masco Corporation designs, manufactures, markets and distributes branded home improvement and building products. The Company operates through four business segments: Plumbing Products, Decorative Architectural Products, Cabinetry Products, and Windows and Other Specialty Products. The Company’s portfolio of brands includes BEHR paint; DELTA and HANSGROHE faucets, bath and shower fixtures; KRAFTMAID and MERILLAT cabinets; MILGARD windows and doors, and HOT SPRING spas. The Company’s plumbing products include faucets, showerheads, handheld showers, valves, bathing units, shower enclosures and toilets and are sold to home center retailers and to wholesalers and distributors. It also produces architectural coatings, including paints, primers, specialty paints, stains and waterproofing products. In North America, it manufactures and sells value-priced, stock and semi-custom assembled cabinetry for kitchen, bath, storage, home office and home entertainment applications.
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