James Hardie Industries PLC. (NYSE: JHX) and Eagle Materials (NYSE:EXP) are both mid-cap construction companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitabiliy.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for James Hardie Industries PLC. and Eagle Materials, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
James Hardie Industries PLC. 0 1 1 0 2.50
Eagle Materials 0 2 3 0 2.60

Eagle Materials has a consensus target price of $100.00, indicating a potential upside of 8.32%. Given Eagle Materials’ stronger consensus rating and higher possible upside, analysts clearly believe Eagle Materials is more favorable than James Hardie Industries PLC..

Profitability

This table compares James Hardie Industries PLC. and Eagle Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
James Hardie Industries PLC. 14.39% -104.72% 14.01%
Eagle Materials 16.36% 18.07% 10.19%

Volatility and Risk

James Hardie Industries PLC. has a beta of 1.15, suggesting that its share price is 15% more volatile than the S&P 500. Comparatively, Eagle Materials has a beta of 1.23, suggesting that its share price is 23% more volatile than the S&P 500.

Dividends

James Hardie Industries PLC. pays an annual dividend of $0.29 per share and has a dividend yield of 1.9%. Eagle Materials pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. James Hardie Industries PLC. pays out 16.2% of its earnings in the form of a dividend. Eagle Materials pays out 9.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. James Hardie Industries PLC. has raised its dividend for 3 consecutive years. James Hardie Industries PLC. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

0.8% of James Hardie Industries PLC. shares are owned by institutional investors. Comparatively, 93.2% of Eagle Materials shares are owned by institutional investors. 4.1% of Eagle Materials shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares James Hardie Industries PLC. and Eagle Materials’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
James Hardie Industries PLC. $1.92 billion 3.49 $436.50 million $1.79 8.49
Eagle Materials $1.21 billion 3.70 $373.33 million $4.10 22.52

James Hardie Industries PLC. has higher revenue and earnings than Eagle Materials. James Hardie Industries PLC. is trading at a lower price-to-earnings ratio than Eagle Materials, indicating that it is currently the more affordable of the two stocks.

Summary

Eagle Materials beats James Hardie Industries PLC. on 12 of the 17 factors compared between the two stocks.

About James Hardie Industries PLC.

James Hardie Industries Plc is a manufacturer of fiber cement products and systems for internal and external building construction applications in the United States, Australia, New Zealand, and the Philippines. The Company’s operating segments are North America and Europe Fiber Cement, and Asia Pacific Fiber Cement. The North America and Europe Fiber Cement manufactures fiber cement interior linings, exterior siding products and related accessories in the United States. The Asia Pacific Fiber Cement includes fiber cement manufactured in Australia, New Zealand and the Philippines, and sold in Australia, New Zealand, Asia, the Middle East (Israel, Saudi Arabia, Lebanon and the United Arab Emirates) and various Pacific Islands. The Company offers a range of fiber-cement building materials for both internal and external use across a range of applications, including external siding, internal walls, floors, ceilings, trim, fencing and facades.

About Eagle Materials

Eagle Materials Inc. is a supplier of construction products, building materials and materials used for oil and natural gas extraction. The Company operates through five segments: Cement, Concrete and Aggregates, Gypsum Wallboard, Recycled Paperboard, and Oil and Gas Proppants. The Company’s construction products are used in residential, industrial, commercial and infrastructure construction, and include cement, slag, concrete and aggregates. Its building materials include gypsum wallboard. Its basic material used for oil and natural gas extraction include frac sand and oil well cement. It sells cement in over six regional markets, including northern Nevada and California, the greater Chicago area, the Rocky Mountain region, the Central Plains region and Texas. It sells slag in the greater Chicago, Illinois area and the greater Midwest area. It has approximately three concrete and aggregates businesses. It also operates a recycled paperboard business.

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