Critical Survey: Cemex S.A.B. de C.V. (CX) versus Armstrong World Industries (AWI)

Cemex S.A.B. de C.V. (NYSE: CX) and Armstrong World Industries (NYSE:AWI) are both mid-cap basic materials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, earnings, dividends and risk.

Volatility & Risk

Cemex S.A.B. de C.V. has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, Armstrong World Industries has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500.

Earnings & Valuation

This table compares Cemex S.A.B. de C.V. and Armstrong World Industries’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Cemex S.A.B. de C.V. $13.40 billion 0.85 $752.16 million $0.58 13.41
Armstrong World Industries $1.23 billion 2.16 $104.70 million $2.74 18.39

Cemex S.A.B. de C.V. has higher revenue and earnings than Armstrong World Industries. Cemex S.A.B. de C.V. is trading at a lower price-to-earnings ratio than Armstrong World Industries, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Cemex S.A.B. de C.V. and Armstrong World Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cemex S.A.B. de C.V. 8.38% 8.71% 3.10%
Armstrong World Industries 11.44% 46.62% 7.85%

Insider & Institutional Ownership

42.8% of Cemex S.A.B. de C.V. shares are owned by institutional investors. 1.0% of Cemex S.A.B. de C.V. shares are owned by insiders. Comparatively, 1.7% of Armstrong World Industries shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Cemex S.A.B. de C.V. and Armstrong World Industries, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cemex S.A.B. de C.V. 0 3 4 1 2.75
Armstrong World Industries 0 4 4 0 2.50

Cemex S.A.B. de C.V. currently has a consensus target price of $10.46, indicating a potential upside of 34.57%. Armstrong World Industries has a consensus target price of $50.33, indicating a potential downside of 0.13%. Given Cemex S.A.B. de C.V.’s stronger consensus rating and higher possible upside, research analysts plainly believe Cemex S.A.B. de C.V. is more favorable than Armstrong World Industries.

Summary

Armstrong World Industries beats Cemex S.A.B. de C.V. on 8 of the 14 factors compared between the two stocks.

About Cemex S.A.B. de C.V.

CEMEX, S.A.B. de C.V. (CEMEX) is an operating and holding company engaged, directly or indirectly, through its operating subsidiaries, primarily in the production, distribution, marketing and sale of cement, ready-mix concrete, aggregates, clinker and other construction materials throughout the world, and that provides construction-related services to customers and communities in over 50 countries throughout the world. The Company operates in various locations, including Mexico, the United States, Europe, South America, Central America, the Caribbean, Asia, the Middle East and Africa. Its cement production facilities are located in Mexico, the United States, Spain, Egypt, Germany, Colombia, the Philippines, Poland, the Dominican Republic, the United Kingdom, Panama, Latvia, Puerto Rico, Thailand, Costa Rica and Nicaragua. The Company is a supplier of aggregates, primarily the crushed stone, sand and gravel, used in various forms of construction.

About Armstrong World Industries

Armstrong World Industries, Inc. (AWI) is a global producer of ceiling systems. The Company owns and operates the Building Products (Ceilings) segment. The Company designs, manufactures and sells ceiling systems (primarily mineral fiber, fiberglass wool and metal) around the world. Its products are used in commercial and institutional buildings. Its geographical segments include Americas (including Canada); Europe, Middle East and Africa (including Russia) (EMEA), and Pacific Rim. As of December 31, 2016, it had 15 manufacturing plants in eight countries, including six plants located throughout the United States. Its Americas segment sells products for use in single and multi-family housing. It sells commercial products to building materials distributors re-selling its products to contractors, subcontractors’ alliances, architect and design firms, and facility owners. Residential ceiling products are sold in the Americas primarily to wholesalers and retailers.

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