Analyzing Quanex Building Products (NYSE:NX) and Assa Abloy (OTCMKTS:ASAZY)

Assa Abloy (OTCMKTS:ASAZY) and Quanex Building Products (NYSE:NX) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, risk, valuation and analyst recommendations.

Dividends

Assa Abloy pays an annual dividend of $0.17 per share and has a dividend yield of 1.0%. Quanex Building Products pays an annual dividend of $0.32 per share and has a dividend yield of 1.6%. Assa Abloy pays out 21.5% of its earnings in the form of a dividend. Quanex Building Products pays out 32.3% 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.

Earnings and Valuation

This table compares Assa Abloy and Quanex Building Products”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Assa Abloy	$15.58 billion	2.50	$1.50 billion	$0.79	22.18
Quanex Building Products	$1.84 billion	0.51	-$250.81 million	$0.99	20.78

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

Institutional & Insider Ownership

97.5% of Quanex Building Products shares are owned by institutional investors. 1.9% of Quanex Building Products 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.

Analyst Ratings

This is a breakdown of current recommendations for Assa Abloy and Quanex Building Products, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Assa Abloy	0	3	4	1	2.75
Quanex Building Products	0	2	1	0	2.33

Quanex Building Products has a consensus target price of $28.00, suggesting a potential upside of 36.11%. Given Quanex Building Products’ higher possible upside, analysts plainly believe Quanex Building Products is more favorable than Assa Abloy.

Profitability

This table compares Assa Abloy and Quanex Building Products’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Assa Abloy	10.82%	15.56%	7.59%
Quanex Building Products	2.43%	11.61%	4.30%

Volatility & Risk

Assa Abloy has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500. Comparatively, Quanex Building Products has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Summary

Assa Abloy beats Quanex Building Products on 12 of the 17 factors compared between the two stocks.

About Assa Abloy

ASSA ABLOY AB (publ) provides door opening and access products, solutions, and services for the institutional, commercial, and residential markets in Europe, the Middle East, India, Africa, North and South America, Asia, and Oceania. The company provides digital access solutions, such as electronic access control ecosystem, wireless solutions, electronic key solutions, standalone access solutions, and wired solutions; swing, revolving, and sliding doors; mechanical products, including hinges, lever handles, mortise lockcases, euro profile cylinders, panic exit devices, door closers, floor spring, and general hardware; and doors. It offers Openings Studio, a building information modeling software ecosystem is collaboration tool for designing, documenting, and managing openings. The company provides its products primarily under the ASSA ABLOY, Yale, and HID brands. It sells its products through distributors and wholesalers. The company serves aviation, education, distribution and logistics, entertainment and public facility, finance and banking, government and military, healthcare, hospitality, manufacturing, mining, office and enterprise, homes and residence, retail, shipyards, and transportation industries. ASSA ABLOY AB (publ) was incorporated in 1954 and is based in Stockholm, Sweden.

About Quanex Building Products

Quanex Building Products Corporation, together with its subsidiaries, provides components for the fenestration industry in the United States, rest of Europe, Canada, Asia, the United Kingdom, and internationally. The company operates through three segments: North American Fenestration, European Fenestration, and North American Cabinet Components. It 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. In addition, the company provides various non-fenestration components and products, including solar panel sealants, trim moldings, vinyl decking, fencing, water retention barriers, and conservatory roof components. It 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 based in Houston, Texas.