Construction Partners (NASDAQ:ROAD – Get Free Report) and James Hardie Industries (NYSE:JHX – Get Free Report) are both mid-cap construction companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.
Profitability
This table compares Construction Partners and James Hardie Industries’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Construction Partners | 3.04% | 12.24% | 3.81% |
| James Hardie Industries | 8.75% | 27.95% | 10.84% |
Earnings and Valuation
This table compares Construction Partners and James Hardie Industries”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Construction Partners | $1.82 billion | 3.86 | $68.93 million | $1.37 | 91.71 |
| James Hardie Industries | $3.88 billion | 2.26 | $424.00 million | $0.77 | 26.50 |
James Hardie Industries has higher revenue and earnings than Construction Partners. James Hardie Industries is trading at a lower price-to-earnings ratio than Construction Partners, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Construction Partners has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, James Hardie Industries has a beta of 1.79, meaning that its stock price is 79% more volatile than the S&P 500.
Insider and Institutional Ownership
94.8% of Construction Partners shares are owned by institutional investors. Comparatively, 8.0% of James Hardie Industries shares are owned by institutional investors. 16.4% of Construction Partners shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Analyst Recommendations
This is a breakdown of recent ratings for Construction Partners and James Hardie Industries, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Construction Partners | 0 | 2 | 1 | 2 | 3.00 |
| James Hardie Industries | 0 | 1 | 9 | 1 | 3.00 |
Construction Partners currently has a consensus price target of $112.33, suggesting a potential downside of 10.59%. James Hardie Industries has a consensus price target of $31.89, suggesting a potential upside of 56.29%. Given James Hardie Industries’ higher probable upside, analysts clearly believe James Hardie Industries is more favorable than Construction Partners.
Summary
James Hardie Industries beats Construction Partners on 8 of the 14 factors compared between the two stocks.
About Construction Partners
Construction Partners, Inc., a civil infrastructure company, constructs and maintains roadways in Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee. The company provides various products and services to public and private infrastructure projects, such as highways, roads, bridges, airports, and commercial and residential developments. It also engages in manufacturing and distributing hot mix asphalt (HMA) for internal use and sales to third parties in connection with construction projects; and paving activities, including the construction of roadway base layers and application of asphalt pavement. In addition, the company is involved in site development, including the installation of utility and drainage systems; mining aggregates, such as sand, gravel, and construction stones that are used as raw materials in the production of HMA; and distributing liquid asphalt cement for internal use and sales to third parties in connection with HMA production. The company was formerly known as SunTx CPI Growth Company, Inc. and changed its name to Construction Partners, Inc. in September 2017. Construction Partners, Inc. was founded in 2007 and is headquartered in Dothan, Alabama.
About James Hardie Industries
James Hardie Industries plc manufactures and sells fiber cement, fiber gypsum, and cement bonded building products for interior and exterior building construction applications primarily in the United States, Australia, Europe, New Zealand, and the Philippines. The company operates through North America Fiber Cement, Asia Pacific Fiber Cement, and Europe Building Products segments. It offers fiber cement interior linings, exterior siding products, and related accessories; and various fiber cement products for a range of applications, including external cladding, internal walls, ceilings, floors, soffits, fences, and facades. The company also provides fiber gypsum and cement-bonded boards for use in the timber frame construction, dry lining, DIY, and structural fire protection applications. Its products are used in residential repair and remodel, and commercial and residential new construction markets James Hardie Industries plc was founded in 1888 and is based in Dublin, Ireland.
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