Critical Analysis: AZEK (NYSE:AZEK) and Carrier Global (NYSE:CARR)

AZEK (NYSE:AZEK) and Carrier Global (NYSE:CARR) are both construction companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Valuation & Earnings

This table compares AZEK and Carrier Global”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AZEK	$1.52 billion	5.14	$153.38 million	$1.02	53.28
Carrier Global	$22.28 billion	2.90	$5.60 billion	$6.46	11.65

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

Volatility & Risk

AZEK has a beta of 1.82, indicating that its share price is 82% more volatile than the S&P 500. Comparatively, Carrier Global has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Profitability

This table compares AZEK and Carrier Global’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AZEK	9.92%	13.87%	8.63%
Carrier Global	25.45%	18.10%	6.76%

Institutional and Insider Ownership

97.4% of AZEK shares are owned by institutional investors. Comparatively, 91.0% of Carrier Global shares are owned by institutional investors. 3.2% of AZEK shares are owned by company insiders. Comparatively, 7.2% of Carrier Global shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for AZEK and Carrier Global, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AZEK	0	10	7	0	2.41
Carrier Global	0	6	11	1	2.72

AZEK currently has a consensus price target of $53.93, suggesting a potential downside of 0.77%. Carrier Global has a consensus price target of $83.82, suggesting a potential upside of 11.33%. Given Carrier Global’s stronger consensus rating and higher possible upside, analysts plainly believe Carrier Global is more favorable than AZEK.

Summary

Carrier Global beats AZEK on 10 of the 15 factors compared between the two stocks.

About AZEK

The AZEK Company Inc. engages in the design, manufacturing, and selling of building products for residential, commercial, and industrial markets in the United States and Canada. It operates through two segments: Residential and Commercial. The Residential segment designs and manufactures engineered outdoor living products, such as decking, railing, trim and molding, siding and cladding, pergolas and cabanas, and accessories under the TimberTech, AZEK Exteriors, VERSATEX, ULTRALOX, StruXure, and INTEX brands. The Commercial segment offers bathroom partitions, shower and dressing stalls, lockers and other storage solutions, and engineered plastic sheet products under the Aria, Eclipse, Hiny Hiders, TuffTec, and Duralife brands. This segment also offers bathroom partitions, shower and dressing stalls, lockers, storage solutions, extruded plastic sheet, and non-fabricated products under the Aria, Eclipse, Hiny Hiders, TuffTec, and Duralife brands. The company was formerly known as Delaware corporation and changed its name to The AZEK Company Inc. in June 2020. The AZEK Company Inc. was incorporated in 2013 and is headquartered in Chicago, Illinois.

About Carrier Global

Carrier Global Corporation provides heating, ventilating, and air conditioning (HVAC), refrigeration, fire, security, and building automation technologies in the United States, Europe, the Asia Pacific, and internationally. It operates through three segments: HVAC, Refrigeration, and Fire & Security. The HVAC segment provides products, controls, services, and solutions to meet the heating, cooling, and ventilation needs of residential and commercial customers. Its products include air conditioners, heating systems, heat pumps, controls, and aftermarket components, as well as aftermarket repair and maintenance services and building automation solutions. The Refrigeration segment offers transport refrigeration and monitoring products and services, as well as digital solutions for trucks, trailers, shipping containers, intermodal applications, food retail, and warehouse cooling; and commercial refrigeration solutions, such as refrigerated cabinets, freezers, systems, and controls. The Fire & Security segment provides various residential, commercial, and industrial technologies, including fire, flame, gas, smoke, and carbon monoxide detection; portable fire extinguishers; fire suppression systems; intruder alarms; access control systems; video management systems; and electronic controls. This segment also offers fire and security service, such as audit, design, installation, and system integration, as well as aftermarket maintenance and repair and monitoring services. It offers its products under the Autronica, Det-Tronics, Edwards, Aritech, Fireye, GST, Kidde, LenelS2, Marioff, Onity, and Supra; Carrier, Toshiba, Automated Logic, Bryant, CIAT, Day & Night, Heil, NORESCO, and Riello; and Carrier Commercial Refrigeration, Carrier Transicold, and Sensitech brands. Carrier Global Corporation was incorporated in 2019 and is headquartered in Palm Beach Gardens, Florida.