Lumber Liquidators (NYSE: LL) and Building Materials (NASDAQ:BMCH) are both small-cap retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.
Volatility and Risk
Lumber Liquidators has a beta of 1.74, indicating that its stock price is 74% more volatile than the S&P 500. Comparatively, Building Materials has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500.
This table compares Lumber Liquidators and Building Materials’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings & Valuation
This table compares Lumber Liquidators and Building Materials’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Lumber Liquidators||$1.03 billion||0.65||-$37.82 million||($1.33)||-17.62|
|Building Materials||$3.37 billion||0.38||$57.42 million||$1.02||18.48|
Building Materials has higher revenue and earnings than Lumber Liquidators. Lumber Liquidators is trading at a lower price-to-earnings ratio than Building Materials, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
78.5% of Lumber Liquidators shares are owned by institutional investors. 1.9% of Lumber Liquidators shares are owned by company insiders. Comparatively, 1.2% of Building Materials shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This is a breakdown of current ratings and price targets for Lumber Liquidators and Building Materials, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Lumber Liquidators presently has a consensus target price of $25.10, indicating a potential upside of 7.13%. Building Materials has a consensus target price of $23.43, indicating a potential upside of 24.29%. Given Building Materials’ stronger consensus rating and higher possible upside, analysts plainly believe Building Materials is more favorable than Lumber Liquidators.
Building Materials beats Lumber Liquidators on 9 of the 13 factors compared between the two stocks.
About Lumber Liquidators
Lumber Liquidators Holdings, Inc., together with its subsidiaries, operates as a multi-channel specialty retailer of hardwood flooring, and hardwood flooring enhancements and accessories. The company offers hardwood species, engineered hardwood, laminates, resilient vinyl flooring, and wood-look ceramic; renewable flooring, and bamboo and cork products; and a selection of flooring enhancements and accessories, including moldings, noise-reducing underlay, adhesives, and flooring tools under the Bellawood and Morning Star Bamboo brands. It also provides in-home delivery and installation services. The company primarily serves homeowners, or to contractors on behalf of homeowners. As of February 27, 2018, it operated approximately 390 stores in North America. The company also offers its products through its Website, catalogs, and call center. Lumber Liquidators Holdings, Inc. was founded in 1994 and is headquartered in Toano, Virginia.
About Building Materials
BMC Stock Holdings, Inc. operates as lumber and building materials distributor and solutions provider in the United States. Its primary products include structural components, such as floor trusses, roof trusses, wall panels, and engineered wood products; lumber and lumber sheet goods, including dimensional lumber, plywood, and oriented strand board products used in on-site house framing under the Ready-Frame brand; and millwork, doors, and windows comprising interior and exterior doors, windows, interior trim, custom millwork, moldings, stairs and stair parts, and cabinetry and other products. The company also sells other building products and services that consist of hardware, wood boards, gypsum, insulation, roofing, siding, and flooring; and offers design, product specification, installation, and installation management services. It serves large-scale production homebuilders, custom homebuilders, multi-family builders, and repair and remodeling contractors. The company provides its products through a network of suppliers. BMC Stock Holdings, Inc. was founded in 1987 and is headquartered in Atlanta, Georgia.
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