Gibraltar Industries (NASDAQ: ROCK) and Synalloy Corporation (NASDAQ:SYNL) are both small-cap construction companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, valuation, institutional ownership, dividends, risk and profitability.

Volatility and Risk

Gibraltar Industries has a beta of 1.83, suggesting that its stock price is 83% more volatile than the S&P 500. Comparatively, Synalloy Corporation has a beta of 0.15, suggesting that its stock price is 85% less volatile than the S&P 500.

Profitability

This table compares Gibraltar Industries and Synalloy Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gibraltar Industries 2.38% 10.14% 5.09%
Synalloy Corporation -1.54% 0.64% 0.38%

Valuation & Earnings

This table compares Gibraltar Industries and Synalloy Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Gibraltar Industries $958.80 million 0.94 $109.22 million $0.71 39.86
Synalloy Corporation $161.06 million 0.60 $7.35 million ($0.29) -38.45

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

Insider and Institutional Ownership

47.6% of Synalloy Corporation shares are owned by institutional investors. 0.5% of Gibraltar Industries shares are owned by insiders. Comparatively, 10.6% of Synalloy Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Gibraltar Industries and Synalloy Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gibraltar Industries 0 0 2 0 3.00
Synalloy Corporation 0 0 0 0 N/A

Gibraltar Industries presently has a consensus price target of $34.50, suggesting a potential upside of 21.91%. Given Gibraltar Industries’ higher probable upside, equities research analysts plainly believe Gibraltar Industries is more favorable than Synalloy Corporation.

Summary

Gibraltar Industries beats Synalloy Corporation on 10 of the 13 factors compared between the two stocks.

Gibraltar Industries Company Profile

Gibraltar Industries, Inc. is a manufacturer and distributor of building products for industrial, transportation infrastructure, residential housing, renewable energy and resource conservation markets. The Company’s segments include Residential Products; Industrial and Infrastructure Products, and Renewable Energy and Conservation. The Residential Products segment services residential housing construction and residential repair and remodeling activity with products including roof and foundation ventilation products, rain dispersion products and roof ventilation accessories. The Industrial and Infrastructure Products segment focuses on a range of markets, including industrial and commercial construction, automotive, airports and energy and power generation markets with products. The Renewable Energy and Conservation segment focuses on the design, engineering, manufacturing and installation of solar racking systems and commercial, institutional and retail greenhouse structures.

Synalloy Corporation Company Profile

Synalloy Corporation is a chemical manufacturing company. The Company operates through two segments: the Metals Segment and the Specialty Chemicals Segment. The Company’s Metals Segment comprises three subsidiaries: Synalloy Metals, Inc., which owns Bristol Metals, LLC (BRISMET), located in Bristol, Tennessee; Palmer of Texas Tanks, Inc. (Palmer), located in Andrews, Texas; and Specialty Pipe & Tube, Inc. (Specialty), located in Mineral Ridge, Ohio and Houston, Texas. The Company’s Metals Segment manufactures stainless steel, other alloy pipe, storage solutions and separation equipment. The Company’s Specialty Chemicals segment consists of the Company’s subsidiary, Manufacturers Soap and Chemical Company (MS&C). The Specialty Chemicals Segment manufactures lubricants, surfactants, reaction intermediaries, sulfated fats and oils, and chemical tolling manufacturing resources.

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