Builders FirstSource (BLDR) and Cummins (NYSE:CMI) Head to Head Analysis
Builders FirstSource (NASDAQ: BLDR) and Cummins (NYSE:CMI) are both retail/wholesale companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, valuation, profitability, analyst recommendations, earnings and dividends.
Earnings & Valuation
This table compares Builders FirstSource and Cummins’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Builders FirstSource||$6.67 billion||0.28||$367.24 million||$1.52||10.75|
|Cummins||$18.36 billion||1.42||$2.35 billion||$8.86||17.57|
Cummins has higher revenue and earnings than Builders FirstSource. Builders FirstSource is trading at a lower price-to-earnings ratio than Cummins, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Builders FirstSource has a beta of 2.16, indicating that its share price is 116% more volatile than the S&P 500. Comparatively, Cummins has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for Builders FirstSource and Cummins, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Builders FirstSource currently has a consensus target price of $17.33, indicating a potential upside of 6.08%. Cummins has a consensus target price of $156.92, indicating a potential upside of 0.81%. Given Builders FirstSource’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Builders FirstSource is more favorable than Cummins.
This table compares Builders FirstSource and Cummins’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Cummins pays an annual dividend of $4.10 per share and has a dividend yield of 2.6%. Builders FirstSource does not pay a dividend. Cummins pays out 46.3% of its earnings in the form of a dividend. Builders FirstSource has raised its dividend for 7 consecutive years.
Insider & Institutional Ownership
84.8% of Builders FirstSource shares are held by institutional investors. Comparatively, 80.3% of Cummins shares are held by institutional investors. 14.6% of Builders FirstSource shares are held by insiders. Comparatively, 0.6% of Cummins shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Cummins beats Builders FirstSource on 9 of the 17 factors compared between the two stocks.
About Builders FirstSource
Builders FirstSource, Inc. is a supplier and manufacturer of building materials, manufactured components and construction services to professional contractors, sub-contractors, remodelers and consumers. The Company’s operating segments include Northeast, Southeast, South and West. As of December 31, 2016, it operated at 400 locations in 40 states across the United States. It offers an integrated solution to its customers providing manufacturing, supply and installation of a range of structural and related building products. Its manufactured products include factory-built roof and floor trusses, wall panels and stairs, vinyl windows, custom millwork and trim, as well as engineered wood that it designs, cuts and assembles for each home. It assembles interior and exterior doors into pre-hung units. Additionally, it supplies customers with offering of professional grade building products, such as dimensional lumber and lumber sheet goods, and various window, door and millwork lines.
Cummins Inc. designs, manufactures, distributes and services diesel and natural gas engines and engine-related component products. The Company’s segments include Engine, Distribution, Components and Power Systems. The Engine segment manufactures and markets a range of diesel and natural gas powered engines under the Cummins brand name, as well as certain customer brand names, for the heavy and medium-duty truck, bus, recreational vehicle (RV), light-duty automotive and agricultural markets. The Distribution segment consists of the product lines, which service and/or distribute a range of products and services, including parts, engines, power generation and service. The Components segment supplies products, including aftertreatment systems, turbochargers, filtration products and fuel systems for commercial diesel applications. The Power Systems segment consists of businesses, including Power generation, Industrial and Generator technologies.
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