Boise Cascade, L.L.C. (NYSE: BCC) and Universal Forest Products (NASDAQ:UFPI) are both small-cap construction companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitabiliy and valuation.

Dividends

Universal Forest Products pays an annual dividend of $0.90 per share and has a dividend yield of 1.0%. Boise Cascade, L.L.C. does not pay a dividend. Universal Forest Products pays out 17.8% of its earnings in the form of a dividend.

Institutional & Insider Ownership

95.6% of Boise Cascade, L.L.C. shares are held by institutional investors. Comparatively, 81.3% of Universal Forest Products shares are held by institutional investors. 1.0% of Boise Cascade, L.L.C. shares are held by insiders. Comparatively, 3.4% of Universal Forest Products shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Boise Cascade, L.L.C. and Universal Forest Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Boise Cascade, L.L.C. 1.08% 8.01% 3.03%
Universal Forest Products 2.86% 11.89% 7.59%

Volatility and Risk

Boise Cascade, L.L.C. has a beta of 2.06, indicating that its share price is 106% more volatile than the S&P 500. Comparatively, Universal Forest Products has a beta of 1.89, indicating that its share price is 89% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Boise Cascade, L.L.C. and Universal Forest Products, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Boise Cascade, L.L.C. 0 2 1 0 2.33
Universal Forest Products 0 0 1 0 3.00

Boise Cascade, L.L.C. presently has a consensus price target of $30.67, indicating a potential upside of 3.25%. Universal Forest Products has a consensus price target of $110.00, indicating a potential upside of 23.68%. Given Universal Forest Products’ stronger consensus rating and higher possible upside, analysts plainly believe Universal Forest Products is more favorable than Boise Cascade, L.L.C..

Valuation & Earnings

This table compares Boise Cascade, L.L.C. and Universal Forest Products’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Boise Cascade, L.L.C. $4.00 billion 0.29 $164.35 million $1.12 26.52
Universal Forest Products $3.40 billion 0.54 $212.29 million $5.05 17.61

Universal Forest Products has higher revenue, but lower earnings than Boise Cascade, L.L.C.. Universal Forest Products is trading at a lower price-to-earnings ratio than Boise Cascade, L.L.C., indicating that it is currently the more affordable of the two stocks.

Summary

Universal Forest Products beats Boise Cascade, L.L.C. on 10 of the 15 factors compared between the two stocks.

Boise Cascade, L.L.C. Company Profile

Boise Cascade Company is an integrated wood products manufacturer and building materials distributor with operations throughout the United States and one manufacturing facility in Canada. The Company is also a producer of engineered wood products (EWP) and plywood in North America. The Company operates through three segments: Wood Products, Building Materials Distribution, and Corporate and Other. The Company’s products are used primarily in new residential construction, residential repair-and-remodeling projects, light commercial construction and industrial applications. The Company manufactures laminated veneer lumber (LVL), I-joists, and laminated beams, which are referred to as EWP. The Company’s Building Materials Distribution segment sells a range of building materials, including OSB, plywood and lumber (collectively commodities). The Company’s subsidiaries include Boise Cascade Wood Products, L.L.C. and Boise Cascade Building Materials Distribution, L.L.C.

Universal Forest Products Company Profile

Universal Forest Products, Inc. is a holding company. The Company, through its subsidiaries, supplies wood, wood composite and other products to three primary markets, such as retail, construction and industrial. Its segments include North, South, West, Alternative Materials, International, idX Holdings, Inc. (idX) and Corporate divisions. idX is a designer, manufacturer and installer of in-store environments. It designs, manufactures and markets wood and wood-alternative products for national home centers and other retailers; structural lumber and other products for the manufactured housing industry; engineered wood components for residential and commercial construction; specialty wood packaging, components and packing materials for various industries, and customized interior fixtures used in a range of retail stores, commercial and other structures. Its customers comprising retail market are national home center retailers and retail-oriented regional lumberyards, among others.

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