Builders FirstSource (NASDAQ: BLDR) and Foundation Building Materials (NYSE:FBM) are both small-cap retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.
This table compares Builders FirstSource and Foundation Building Materials’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Foundation Building Materials||N/A||N/A||N/A|
Valuation and Earnings
This table compares Builders FirstSource and Foundation Building Materials’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Builders FirstSource||$6.67 billion||0.27||$367.24 million||$1.52||10.67|
|Foundation Building Materials||$1.89 billion||0.29||$108.42 million||N/A||N/A|
Builders FirstSource has higher revenue and earnings than Foundation Building Materials.
This is a summary of current ratings for Builders FirstSource and Foundation Building Materials, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Foundation Building Materials||0||2||7||0||2.78|
Builders FirstSource currently has a consensus target price of $17.33, suggesting a potential upside of 6.86%. Foundation Building Materials has a consensus target price of $18.43, suggesting a potential upside of 43.86%. Given Foundation Building Materials’ stronger consensus rating and higher possible upside, analysts clearly believe Foundation Building Materials is more favorable than Builders FirstSource.
Institutional and Insider Ownership
85.5% of Builders FirstSource shares are held by institutional investors. Comparatively, 92.1% of Foundation Building Materials shares are held by institutional investors. 14.6% of Builders FirstSource shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Builders FirstSource beats Foundation Building Materials on 6 of the 11 factors compared between the two stocks.
Builders FirstSource Company Profile
Builders FirstSource, Inc. is a supplier and manufacturer of building materials, manufactured components and construction services to professional contractors, sub-contractors, remodelers and consumers. The Company’s operating segments include Northeast, Southeast, South and West. As of December 31, 2016, it operated at 400 locations in 40 states across the United States. It offers an integrated solution to its customers providing manufacturing, supply and installation of a range of structural and related building products. Its manufactured products include factory-built roof and floor trusses, wall panels and stairs, vinyl windows, custom millwork and trim, as well as engineered wood that it designs, cuts and assembles for each home. It assembles interior and exterior doors into pre-hung units. Additionally, it supplies customers with offering of professional grade building products, such as dimensional lumber and lumber sheet goods, and various window, door and millwork lines.
Foundation Building Materials Company Profile
Foundation Building Materials, Inc. is a specialty distributor of wallboard and suspended ceiling systems in the United States and Canada. The Company’s segments include Specialty Building Products and Mechanical Insulation. The Company fabricates and distributes its products for specialty contractors seeking to improve or maintain energy efficiency in a range of commercial and industrial buildings. It serves markets across the United States and in Canada. Specialty building products segment distributes wallboard and accessories, metal framing, suspended ceiling systems and other products. Other products include stucco and Exterior insulation and finish system (EIFS), as well as offerings, such as tools, safety accessories and fasteners. Its Mechanical insulation segment includes insulation solutions for pipes and mechanical systems and the primary end markets served are new non-residential construction, non- residential repair and remodel construction and industrial markets.
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