Reviewing Construction Partners (NASDAQ:ROAD) & Installed Building Products (NYSE:IBP)

Installed Building Products (NYSE:IBP) and Construction Partners (NASDAQ:ROAD) are both mid-cap construction companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, institutional ownership and analyst recommendations.

Earnings & Valuation

This table compares Installed Building Products and Construction Partners”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Installed Building Products	$2.97 billion	1.94	$265.40 million	$9.38	22.82
Construction Partners	$2.81 billion	2.27	$101.78 million	$2.28	49.50

Installed Building Products has higher revenue and earnings than Construction Partners. Installed Building Products is trading at a lower price-to-earnings ratio than Construction Partners, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Installed Building Products and Construction Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Installed Building Products	8.65%	42.28%	13.74%
Construction Partners	3.90%	15.22%	4.36%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Installed Building Products and Construction Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Installed Building Products	2	12	1	0	1.93
Construction Partners	0	2	4	1	2.86

Installed Building Products presently has a consensus price target of $247.67, indicating a potential upside of 15.70%. Construction Partners has a consensus price target of $137.80, indicating a potential upside of 22.10%. Given Construction Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Construction Partners is more favorable than Installed Building Products.

Institutional and Insider Ownership

99.6% of Installed Building Products shares are owned by institutional investors. Comparatively, 94.8% of Construction Partners shares are owned by institutional investors. 13.8% of Installed Building Products shares are owned by insiders. Comparatively, 15.7% of Construction Partners shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

Installed Building Products has a beta of 1.84, suggesting that its stock price is 84% more volatile than the S&P 500. Comparatively, Construction Partners has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Summary

Installed Building Products beats Construction Partners on 8 of the 15 factors compared between the two stocks.

About Installed Building Products

Installed Building Products, Inc., together with its subsidiaries, engages in the installation of insulation, waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mirrors, and other products in the United States. It operates through Installation, Distribution, and Manufacturing operation segments. The company offers a range of insulation materials, such as fiberglass and cellulose, and spray foam insulation materials. It is also involved in the installation of insulation and sealant materials in various areas of a structure, which includes basement and crawl space, building envelope, attic, and acoustical applications. In addition, the company installs a range of caulk and sealant products that control air infiltration in residential and commercial buildings; and waterproofing options, including sheet and hot applied waterproofing membranes, as well as deck coating, bentonite, and air and vapor systems. Further, it distributes spray foam insulation, metal building insulation, residential insulation, and mechanical and fabricated Styrofoam insulation, as well as accessories and equipment used in the insulation installation process; and manufactures cellulose insulation and specialty industrial fibers. It serves homebuilders, multi-family and commercial and agricultural construction firms, individual homeowners, and repair and remodeling contractors. The company was formerly known as CCIB Holdco, Inc. Installed Building Products, Inc. was founded in 1977 and is based in Columbus, Ohio.

About Construction Partners

Construction Partners, Inc., a civil infrastructure company, constructs and maintains roadways in Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee. The company provides various products and services to public and private infrastructure projects, such as highways, roads, bridges, airports, and commercial and residential developments. It also engages in manufacturing and distributing hot mix asphalt (HMA) for internal use and sales to third parties in connection with construction projects; and paving activities, including the construction of roadway base layers and application of asphalt pavement. In addition, the company is involved in site development, including the installation of utility and drainage systems; mining aggregates, such as sand, gravel, and construction stones that are used as raw materials in the production of HMA; and distributing liquid asphalt cement for internal use and sales to third parties in connection with HMA production. The company was formerly known as SunTx CPI Growth Company, Inc. and changed its name to Construction Partners, Inc. in September 2017. Construction Partners, Inc. was founded in 2007 and is headquartered in Dothan, Alabama.