Trex (NYSE:TREX – Get Free Report) and AAON (NASDAQ:AAON – Get Free Report) are both mid-cap industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, institutional ownership, risk, profitability, earnings and analyst recommendations.
Analyst Ratings
This is a breakdown of recent recommendations for Trex and AAON, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Trex | 2 | 8 | 13 | 0 | 2.48 |
| AAON | 0 | 3 | 4 | 0 | 2.57 |
Trex presently has a consensus target price of $50.48, indicating a potential upside of 1.42%. AAON has a consensus target price of $120.00, indicating a potential upside of 58.25%. Given AAON’s stronger consensus rating and higher possible upside, analysts clearly believe AAON is more favorable than Trex.
Institutional & Insider Ownership
96.0% of Trex shares are held by institutional investors. Comparatively, 70.8% of AAON shares are held by institutional investors. 0.9% of Trex shares are held by insiders. Comparatively, 18.1% of AAON shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Risk and Volatility
Trex has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500. Comparatively, AAON has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500.
Profitability
This table compares Trex and AAON’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Trex | N/A | N/A | N/A |
| AAON | N/A | N/A | N/A |
Earnings & Valuation
This table compares Trex and AAON”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Trex | $1.21 billion | 4.28 | $174.55 million | $1.68 | 29.63 |
| AAON | $1.93 billion | 3.24 | $158.31 million | $1.92 | 39.49 |
Trex has higher earnings, but lower revenue than AAON. Trex is trading at a lower price-to-earnings ratio than AAON, indicating that it is currently the more affordable of the two stocks.
Summary
AAON beats Trex on 6 of the 11 factors compared between the two stocks.
About Trex
Trex Company, Inc. manufactures and distributes composite decking, railing, and outdoor living products and accessories for residential and commercial markets in the United States. It offers decking products and accessories under the names Trex Transcend, Trex Select, Trex Signature, Trex Transcend Lineage, and Trex Enhance for protection against fading, staining, mold, and scratching; Trex Hideaway, a hidden fastening system; and Trex DeckLighting, a LED dimmable deck lighting for use on posts, floors, and steps. The company also provides Trex Transcend Railing products that are used in Trex decking products and other decking materials; Trex Select Railing products for a simple clean finished look; Trex Enhance Railing system; Trex Signature aluminum railing for a contemporary look; and Trex Select T-Rail railing products. In addition, it offers Trex Seclusions, a fencing product that includes structural posts, bottom and top rails, pickets, and decorative post caps. Further, the company acts as a licensor in various licensing agreements with third parties to manufacture and sell products under the Trex name, including Trex Outdoor Furniture; Trex RainEscape, an above joist deck drainage system; Trex Pergola, a cellular PVC product; Trex Latticeworks outdoor lattice boards; Trex Cornhole boards; Diablo Trex Blade, a saw blade for wood-alternative composite decking; Trex SpiralStairs and structural steel posts; and Trex Outdoor Kitchens, cabinetry, and Storage products. It sells its products through wholesale distributors, retail lumber dealers, and Home Depot and Lowe’s stores. Trex Company, Inc. was founded in 1996 and is headquartered in Winchester, Virginia.
About AAON
AAON, Inc., together with its subsidiaries, engages in engineering, manufacturing, marketing, and selling air conditioning and heating equipment in the United States and Canada. The company operates through three segments: AAON Oklahoma, AAON Coil Products, and BASX. It offers rooftop units, data center cooling solutions, cleanroom systems, chillers, packaged outdoor mechanical rooms, air handling units, makeup air units, energy recovery units, condensing units, geothermal/water-source heat pumps, coils, and controls. The company markets and sells its products to retail, manufacturing, educational, lodging, supermarket, data centers, medical and pharmaceutical, and other commercial industries. It sells its products through a network of independent manufacturer representative organizations and internal sales force, as well as online. The company was incorporated in 1987 and is based in Tulsa, Oklahoma.
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