American Woodmark Corporation (NASDAQ: AMWD) and Caesarstone (NASDAQ:CSTE) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitabiliy, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Insider & Institutional Ownership

80.9% of American Woodmark Corporation shares are held by institutional investors. Comparatively, 57.5% of Caesarstone shares are held by institutional investors. 1.1% of American Woodmark Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares American Woodmark Corporation and Caesarstone’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Woodmark Corporation 6.91% 22.19% 14.56%
Caesarstone 13.29% 17.19% 12.93%

Valuation & Earnings

This table compares American Woodmark Corporation and Caesarstone’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American Woodmark Corporation $1.03 billion 1.56 $123.52 million $4.34 22.73
Caesarstone $558.04 million 2.21 $128.29 million $2.13 16.88

Caesarstone has higher revenue, but lower earnings than American Woodmark Corporation. Caesarstone is trading at a lower price-to-earnings ratio than American Woodmark Corporation, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

American Woodmark Corporation has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500. Comparatively, Caesarstone has a beta of 2.08, indicating that its share price is 108% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for American Woodmark Corporation and Caesarstone, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Woodmark Corporation 0 1 1 0 2.50
Caesarstone 0 3 1 0 2.25

American Woodmark Corporation currently has a consensus price target of $88.00, suggesting a potential downside of 10.80%. Caesarstone has a consensus price target of $42.33, suggesting a potential upside of 17.76%. Given Caesarstone’s higher possible upside, analysts plainly believe Caesarstone is more favorable than American Woodmark Corporation.

Summary

American Woodmark Corporation beats Caesarstone on 8 of the 13 factors compared between the two stocks.

American Woodmark Corporation Company Profile

American Woodmark Corporation manufactures and distributes kitchen cabinets and vanities for the remodeling and new home construction markets. The Company offers framed stock cabinets in approximately 500 different cabinet lines, ranging in price from relatively inexpensive to medium-priced styles. Styles vary by design and color from natural wood finishes to low-pressure laminate surfaces. The product offering of stock cabinets includes approximately 90 door designs in over 20 colors. Stock cabinets consist of cabinet interiors of varying dimensions and construction options, and a maple, oak, cherry, or hickory front frame, door and/or drawer front. The Company’s products are sold under the brand names of American Woodmark, Simply Woodmark, Timberlake, Shenandoah Cabinetry, Shenandoah Value Series and Waypoint Living Spaces. The Company’s primary raw materials used include hard maple, soft maple, oak, cherry, and hickory lumber and plywood.

Caesarstone Company Profile

Caesarstone Ltd., formerly Caesarstone Sdot-Yam Ltd., is a manufacturer of engineered quartz surfaces. The Company’s products consist of engineered quartz, which are installed as countertops in residential kitchens. Its products are primarily used as kitchen countertops in the renovation, remodeling and residential construction end markets. The other applications of its products include vanity tops, wall panels, back splashes, floor tiles, stairs, and other interior surfaces that are used in a range of residential and non-residential applications. Its product offerings include over four collections, such as Classico, Concetto, Motivo and Supernatural, which are marketed as specialty product collections. It sells its products under the Caesarstone brand. Its designs range from fine-grained patterns to coarse-grained color blends with a variegated visual texture. It offers over 70 different colors, with four textures and three thicknesses available for each of the collection’s colors.

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