Bellway (OTCMKTS:BLWYY) & Advanced Drainage Systems (NYSE:WMS) Critical Analysis

Advanced Drainage Systems (NYSE:WMS) and Bellway (OTCMKTS:BLWYY) are both construction companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, earnings, profitability, analyst recommendations, risk and valuation.

Dividends

Advanced Drainage Systems pays an annual dividend of $0.72 per share and has a dividend yield of 0.5%. Bellway pays an annual dividend of $0.50 per share and has a dividend yield of 1.6%. Advanced Drainage Systems pays out 13.2% of its earnings in the form of a dividend. Advanced Drainage Systems has raised its dividend for 1 consecutive years.

Profitability

This table compares Advanced Drainage Systems and Bellway’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Advanced Drainage Systems	13.98%	26.63%	11.80%
Bellway	N/A	N/A	N/A

Insider & Institutional Ownership

89.8% of Advanced Drainage Systems shares are held by institutional investors. 1.6% of Advanced Drainage Systems shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Advanced Drainage Systems and Bellway”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Advanced Drainage Systems	$3.05 billion	3.39	$426.46 million	$5.44	24.84
Bellway	$3.62 billion	0.99	$204.69 million	N/A	N/A

Advanced Drainage Systems has higher earnings, but lower revenue than Bellway.

Volatility and Risk

Advanced Drainage Systems has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500. Comparatively, Bellway has a beta of 0.14, suggesting that its share price is 86% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Advanced Drainage Systems and Bellway, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Advanced Drainage Systems	0	1	6	0	2.86
Bellway	0	4	0	0	2.00

Advanced Drainage Systems presently has a consensus price target of $187.00, suggesting a potential upside of 38.40%. Given Advanced Drainage Systems’ stronger consensus rating and higher possible upside, analysts clearly believe Advanced Drainage Systems is more favorable than Bellway.

Summary

Advanced Drainage Systems beats Bellway on 12 of the 15 factors compared between the two stocks.

About Advanced Drainage Systems

Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products in North America and internationally. The company operates through Pipe, International, Infiltrator, and Allied Products & Other segments. It offers single, double, and triple wall corrugated polypropylene and polyethylene pipes; plastic leachfield chambers and systems; EZflow synthetic aggregate bundles; wastewater purification through mechanical aeration wastewater for residential and commercial systems; septic tanks and accessories; combined treatment and dispersal systems, including advanced enviro-septic and advanced treatment leachfield systems; and allied products, including storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators. The company also purchases and distributes construction fabrics and other geosynthetic products for soil stabilization, reinforcement, filtration, separation, erosion control, and sub-surface drainage, as well as drainage grates and other products. In addition, it provides PVC hubs, rubber sleeves, and stainless-steel bands. The company offers its products for non-residential, residential, agriculture, and infrastructure applications through a network of distribution centers. Advanced Drainage Systems, Inc. incorporated in 1966 and is headquartered in Hilliard, Ohio.

About Bellway

Bellway p.l.c., together with its subsidiaries, engages in the home building business in the United Kingdom. The company builds and sells homes ranging from one-bedroom apartments to six-bedroom family homes, as well as provides homes to housing associations for social housing. It offers homes under Bellway and Ashberry brands. Bellway p.l.c. was incorporated in 1978 and is headquartered in Newcastle upon Tyne, the United Kingdom.