Headwaters (NYSE: HW) and Apogee Enterprises (NASDAQ:APOG) are both cyclical consumer goods & services companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitability, earnings and institutional ownership.

Earnings & Valuation

This table compares Headwaters and Apogee Enterprises’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Headwaters N/A N/A N/A $0.56 43.29
Apogee Enterprises $1.20 billion 1.17 $159.52 million $2.74 17.83

Apogee Enterprises has higher revenue and earnings than Headwaters. Apogee Enterprises is trading at a lower price-to-earnings ratio than Headwaters, indicating that it is currently the more affordable of the two stocks.

Dividends

Apogee Enterprises pays an annual dividend of $0.56 per share and has a dividend yield of 1.1%. Headwaters does not pay a dividend. Apogee Enterprises pays out 20.4% of its earnings in the form of a dividend.

Profitability

This table compares Headwaters and Apogee Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Headwaters 1.98% 5.96% 1.68%
Apogee Enterprises 6.57% 17.89% 10.27%

Risk & Volatility

Headwaters has a beta of 1.7, suggesting that its stock price is 70% more volatile than the S&P 500. Comparatively, Apogee Enterprises has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Headwaters and Apogee Enterprises, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Headwaters 1 6 1 0 2.00
Apogee Enterprises 0 0 3 0 3.00

Headwaters presently has a consensus price target of $23.44, indicating a potential downside of 3.31%. Apogee Enterprises has a consensus price target of $63.33, indicating a potential upside of 29.62%. Given Apogee Enterprises’ stronger consensus rating and higher possible upside, analysts plainly believe Apogee Enterprises is more favorable than Headwaters.

Insider & Institutional Ownership

86.8% of Headwaters shares are owned by institutional investors. 6.4% of Headwaters shares are owned by company insiders. Comparatively, 3.7% of Apogee Enterprises 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.

Summary

Apogee Enterprises beats Headwaters on 9 of the 13 factors compared between the two stocks.

About Headwaters

Headwaters Incorporated is a building materials company operating in the building products and construction materials sectors. The Company sells building products, such as manufactured architectural stone, siding accessory products, roof products and concrete block. The Company’s operating segments include building products, construction materials and energy technology. It also markets coal combustion products (CCPs), including fly ash, which is used as a partial replacement for Portland cement in concrete. The Building Products segment is engaged in designing, manufacturing and marketing of siding accessories used in residential repair and remodeling, and new residential construction applications. The Materials segment markets fly ash in the construction materials sector. The Energy Technology segment is involved in heavy oil upgrading processes through the sale of its HCAT catalyst material. It sells catalytic materials to certain refineries engaged in heavy oil upgrading.

About Apogee Enterprises

Apogee Enterprises, Inc. is engaged in the design and development of glass solutions for enclosing commercial buildings and framing art. The Company operates through four segments: Architectural Glass, Architectural Services, Architectural Framing Systems and Large-Scale Optical Technologies (LSO). The Architectural Glass segment fabricates coated glass used in customized window and wall systems. The Architectural Services segment designs, engineers, fabricates and installs the walls of glass, windows and other curtainwall products making up the outside skin of commercial and institutional buildings. The Architectural Framing Systems segment designs, engineers, fabricates and finishes the aluminum frames used in customized aluminum and glass window, curtainwall, storefront and entrance systems. The Large-Scale Optical Technologies segment manufactures glass and acrylic products for the custom picture framing and fine art markets.

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