Analyzing Quanex Building Products (NYSE:NX) and Howmet Aerospace (NYSE:HWM)
Quanex Building Products (NYSE:NX) and Howmet Aerospace (NYSE:HWM) are both construction companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.
Institutional & Insider Ownership
97.3% of Quanex Building Products shares are owned by institutional investors. Comparatively, 83.9% of Howmet Aerospace shares are owned by institutional investors. 4.1% of Quanex Building Products shares are owned by company insiders. Comparatively, 0.1% of Howmet Aerospace shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This table compares Quanex Building Products and Howmet Aerospace’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Quanex Building Products||-4.82%||10.18%||5.21%|
Volatility & Risk
Quanex Building Products has a beta of 1.57, suggesting that its share price is 57% more volatile than the S&P 500. Comparatively, Howmet Aerospace has a beta of 1.62, suggesting that its share price is 62% more volatile than the S&P 500.
Quanex Building Products pays an annual dividend of $0.32 per share and has a dividend yield of 3.1%. Howmet Aerospace pays an annual dividend of $0.08 per share and has a dividend yield of 0.7%. Quanex Building Products pays out 33.7% of its earnings in the form of a dividend. Howmet Aerospace pays out 3.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Quanex Building Products has increased its dividend for 2 consecutive years. Quanex Building Products is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of recent ratings and price targets for Quanex Building Products and Howmet Aerospace, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Quanex Building Products||0||1||2||0||2.67|
Quanex Building Products currently has a consensus target price of $16.33, suggesting a potential upside of 57.66%. Howmet Aerospace has a consensus target price of $14.00, suggesting a potential upside of 29.99%. Given Quanex Building Products’ stronger consensus rating and higher possible upside, equities analysts clearly believe Quanex Building Products is more favorable than Howmet Aerospace.
Earnings and Valuation
This table compares Quanex Building Products and Howmet Aerospace’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Quanex Building Products||$893.84 million||0.38||-$46.73 million||$0.95||10.91|
|Howmet Aerospace||$14.19 billion||0.33||$470.00 million||$2.11||5.10|
Howmet Aerospace has higher revenue and earnings than Quanex Building Products. Howmet Aerospace is trading at a lower price-to-earnings ratio than Quanex Building Products, indicating that it is currently the more affordable of the two stocks.
Howmet Aerospace beats Quanex Building Products on 9 of the 17 factors compared between the two stocks.
About Quanex Building Products
Quanex Building Products Corporation, together with its subsidiaries, provides components for the fenestration industry worldwide. It operates through three segments: North American Engineered Components, European Engineered Components, and North American Cabinet Components. The company offers flexible insulating glass spacers, extruded vinyl profiles, window and door screens, and precision-formed metal and wood products, as well as cabinet doors and other components for original equipment manufacturers (OEMs) in the kitchen and bathroom cabinet industry. It also provides various non-fenestration components and products, including solar panel sealants, trim moldings, vinyl decking, fencing, water retention barriers, and conservatory roof components. The company sells its products to OEMs in the building products industry through sales representatives, direct sales force, distributors, and independent sales agents. Quanex Building Products Corporation was founded in 1927 and is headquartered in Houston, Texas.
About Howmet Aerospace
Howmet Aerospace Inc. provides advanced engineered solutions for the aerospace and transportation industries. It offers jet engine components, aerospace fastening systems, and titanium structural parts for mission-critical performance and efficiency in aerospace and defense applications, as well as forged wheels for commercial transportation. The company, formerly known as Arconic Inc., is headquartered in Pittsburgh, Pennsylvania.
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