Patrick Industries (NASDAQ: PATK) and PGT Innovations (NASDAQ:PGTI) are both small-cap construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitabiliy and risk.

Insider and Institutional Ownership

90.7% of Patrick Industries shares are owned by institutional investors. Comparatively, 96.8% of PGT Innovations shares are owned by institutional investors. 6.2% of Patrick Industries shares are owned by company insiders. Comparatively, 6.5% of PGT Innovations shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and price targets for Patrick Industries and PGT Innovations, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Patrick Industries 0 1 3 0 2.75
PGT Innovations 0 1 2 0 2.67

Patrick Industries presently has a consensus price target of $76.33, suggesting a potential upside of 5.43%. PGT Innovations has a consensus price target of $13.00, suggesting a potential upside of 0.78%. Given Patrick Industries’ stronger consensus rating and higher possible upside, analysts clearly believe Patrick Industries is more favorable than PGT Innovations.

Risk & Volatility

Patrick Industries has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500. Comparatively, PGT Innovations has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Profitability

This table compares Patrick Industries and PGT Innovations’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Patrick Industries 4.64% 29.55% 11.02%
PGT Innovations 2.66% 8.95% 2.73%

Earnings and Valuation

This table compares Patrick Industries and PGT Innovations’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Patrick Industries $1.29 billion 0.94 $120.71 million $3.90 18.56
PGT Innovations $471.07 million 1.35 $73.65 million $0.46 28.04

Patrick Industries has higher revenue and earnings than PGT Innovations. Patrick Industries is trading at a lower price-to-earnings ratio than PGT Innovations, indicating that it is currently the more affordable of the two stocks.

Summary

Patrick Industries beats PGT Innovations on 9 of the 14 factors compared between the two stocks.

About Patrick Industries

Patrick Industries, Inc. is a manufacturer of component products and distributor of building products and materials for the recreational vehicle (RV) and manufactured housing (MH) industrial markets for customers throughout the United States and Canada. In addition, it is a supplier to certain other industrial markets, such as kitchen cabinet, office and household furniture, fixtures and commercial furnishings, marine, and other industrial markets. The Company’s segments include Manufacturing and Distribution. It manufactures a range of products, which include decorative vinyl and paper laminated panels, solid surface, granite and quartz countertops, fabricated aluminum products, wrapped vinyl, paper and hardwood profile mouldings, slide-out trim and fascia, cabinet doors and components, hardwood furniture, fiberglass and plastic component products including front and rear caps and marine helms, interior passage doors, RV painting, and slotwall panels and components, among others.

About PGT Innovations

PGT Innovations, Inc., formerly PGT, Inc., is a manufacturer of impact-resistant windows and doors. The Company’s brands include CGI, PGT Windows + Doors and WinDoor. CGI serves residential and commercial markets in both new and existing construction. CGI manufacturing and delivery facilities are based in Miami, Florida. PGT Custom Windows + Doors is a manufacturer and supplier of residential impact-resistant glass products. The Company’s manufacturing, glass plant, and delivery facilities are located in North Venice, Florida. WinDoor serves five-star resorts, luxury high-rise condominiums and mansions along the United States coastline. WinDoor’s aluminum and vinyl products come in an array of expansive sizes, custom colors, and configurations. WinDoor manufacturing and delivery facilities are based in Orlando, Florida.

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