GMS (NYSE: GMS) and Foundation Building Materials (NYSE:FBM) are both small-cap retail/wholesale companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.
This table compares GMS and Foundation Building Materials’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Foundation Building Materials||3.66%||3.74%||0.93%|
71.2% of GMS shares are held by institutional investors. Comparatively, 94.3% of Foundation Building Materials shares are held by institutional investors. 5.9% of GMS shares are held by insiders. Comparatively, 0.5% of Foundation Building Materials shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Risk & Volatility
GMS has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500. Comparatively, Foundation Building Materials has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.
This is a summary of current ratings and target prices for GMS and Foundation Building Materials, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Foundation Building Materials||0||1||4||2||3.14|
GMS presently has a consensus target price of $39.20, suggesting a potential upside of 32.79%. Foundation Building Materials has a consensus target price of $17.67, suggesting a potential upside of 20.35%. Given GMS’s higher possible upside, equities research analysts clearly believe GMS is more favorable than Foundation Building Materials.
Earnings & Valuation
This table compares GMS and Foundation Building Materials’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|GMS||$2.32 billion||0.52||$48.88 million||$1.70||17.36|
|Foundation Building Materials||$2.06 billion||0.31||$82.48 million||$0.30||48.93|
Foundation Building Materials has lower revenue, but higher earnings than GMS. GMS is trading at a lower price-to-earnings ratio than Foundation Building Materials, indicating that it is currently the more affordable of the two stocks.
GMS beats Foundation Building Materials on 9 of the 15 factors compared between the two stocks.
GMS Inc. distributes wallboards, suspended ceilings systems, and complementary interior construction products in North America. The company offers wallboard products; and ceilings products, such as suspended mineral fibers, soft fibers, and metal ceiling systems primarily used in offices, hotels, hospitals, retail facilities, schools, and other commercial and institutional buildings. It also distributes steel framing products, including steel tracks, studs, and various other steel products used to frame the interior walls of commercial or institutional buildings; and insulation, ready-mix joint compound, and various other interior construction products, as well as ancillary products, such as tools and safety products. The company markets and sells its products through a network of branches and distribution centers to the interior contractors, as well as home builders. GMS Inc. was founded in 1971 and is headquartered in Tucker, Georgia.
About Foundation Building Materials
Foundation Building Materials, Inc. distributes building products in the United States and Canada. It operates through two segments, Specialty Building Products and Mechanical Insulation. The Specialty Building Products segment distributes wallboard, metal framing, suspended ceiling system, and other products. It also provides wallboard accessories, stucco, and exterior insulation and finish systems, as well as tools, safety accessories, and fasteners. This segment serves non-residential, residential, and non-residential repair and remodel construction markets. The Mechanical Insulation segment distributes and fabricates commercial and industrial insulation for pipes and mechanical systems. It serves non-residential construction, non-residential repair and remodel construction, and industrial markets. The company was founded in 2011 and is headquartered in Tustin, California. Foundation Building Materials, Inc. is a subsidiary of LSF9 Cypress Parent 2 LLC.
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