Comparing Trex (TREX) & Continental Building Products (CBPX)

Trex (NYSE: TREX) and Continental Building Products (NYSE:CBPX) are both construction companies, but which is the better business? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, dividends, profitability and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and recommmendations for Trex and Continental Building Products, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Trex 0 3 2 0 2.40
Continental Building Products 0 2 1 0 2.33

Trex currently has a consensus target price of $71.75, suggesting a potential downside of 9.09%. Continental Building Products has a consensus target price of $26.50, suggesting a potential upside of 9.28%. Given Continental Building Products’ higher probable upside, analysts plainly believe Continental Building Products is more favorable than Trex.

Insider & Institutional Ownership

92.2% of Trex shares are held by institutional investors. 1.0% of Trex shares are held by company insiders. Comparatively, 0.3% of Continental Building Products shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Trex and Continental Building Products’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Trex $504.24 million 4.60 $131.61 million $2.58 30.59
Continental Building Products $474.02 million 1.97 $131.29 million $1.09 22.25

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

Profitability

This table compares Trex and Continental Building Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Trex 15.12% 56.76% 33.15%
Continental Building Products 9.16% 15.45% 7.55%

Risk & Volatility

Trex has a beta of 2.32, meaning that its share price is 132% more volatile than the S&P 500. Comparatively, Continental Building Products has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500.

Summary

Trex beats Continental Building Products on 13 of the 14 factors compared between the two stocks.

About Trex

Trex Company, Inc. is a manufacturer of wood-alternative decking and railing products. The Company’s products are marketed under the brand name Trex and are manufactured in the United States. It offers a set of outdoor living products in the decking, railing, porch, fencing, trim, steel deck framing and outdoor lighting categories. Its decking products include Trex Transcend, Trex Enhance and Trex Select. The Company’s railing products include Trex Transcend Railing, Trex Select Railing and Trex Signature aluminum railing. It offers Trex Transcend Porch Flooring and Railing System, which is an integrated system of porch components and accessories. The Company offers Trex Seclusions fencing product, which consists of structural posts, bottom rail, pickets, top rail and decorative post caps. It offers a triple-coated steel deck framing system called Trex Elevations. The Company also offers outdoor lighting systems, such as Trex DeckLighting and Trex Landscape Lighting.

About Continental Building Products

Continental Building Products, Inc. is a manufacturer of gypsum wallboard and complementary finishing products. The Company operates through wallboard segment. Gypsum wallboard is a primary building material used in residential and commercial construction and in repair and remodel (R&R). It offers customers a range of gypsum wallboard products, including LiftLite, its lightweight product designed to lift and install; its Mold Defense line of products designed for protection against mold and mildew, and its Weather Defense line of moisture and mold-resistant exterior sheathing. The Company also operates a finishing products business that manufactures a line of joint compounds at its plant in Silver Grove (Kentucky) and its joint compound plant in Chambly (Quebec). The Company manufactures gypsum wallboard related products for commercial and residential buildings and houses. The Company’s manufacturing facilities are concentrated in the eastern United States and eastern Canada.

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