Texas Industries (NYSE: TXI) and GCP Applied Technologies (NYSE:GCP) are both materials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Insider and Institutional Ownership

82.3% of GCP Applied Technologies shares are owned by institutional investors. 0.7% of GCP Applied Technologies shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Texas Industries and GCP Applied Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Texas Industries N/A N/A N/A
GCP Applied Technologies 0.26% -44.32% 5.24%

Valuation & Earnings

This table compares Texas Industries and GCP Applied Technologies’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Texas Industries N/A N/A N/A N/A N/A
GCP Applied Technologies $1.35 billion 1.54 $209.90 million $0.04 723.75

GCP Applied Technologies has higher revenue and earnings than Texas Industries.

Analyst Recommendations

This is a summary of current ratings and target prices for Texas Industries and GCP Applied Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Texas Industries 0 1 0 0 2.00
GCP Applied Technologies 0 0 4 0 3.00

Texas Industries currently has a consensus target price of $82.00, suggesting a potential downside of 10.97%. GCP Applied Technologies has a consensus target price of $35.50, suggesting a potential upside of 22.63%. Given GCP Applied Technologies’ stronger consensus rating and higher probable upside, analysts plainly believe GCP Applied Technologies is more favorable than Texas Industries.

Summary

GCP Applied Technologies beats Texas Industries on 8 of the 9 factors compared between the two stocks.

Texas Industries Company Profile

Texas Industries, Inc. is a supplier of construction materials in the southwestern United States. The Company operates in three segments: cement, aggregates and consumer products. Its cement segment produces gray portland cement and specialty cements. The Company’s cement production and distribution facilities are concentrated primarily in Texas and California. Its aggregates segment produces natural aggregates, including sand, gravel and crushed limestone. The Company’s consumer products segment produces ready-mix concrete. It is also a supplier of natural aggregates and ready-mix concrete in Texas and northern Louisiana and in Oklahoma and Arkansas. As of May 31, 2013, the Company had 123 manufacturing facilities in five states. During the fiscal year ended May 31, 2013 (fiscal 2013), it produced approximately 4.3 million tons of finished cement. The Company produced approximately 14.2 million tons of natural aggregates during fiscal 2013.

GCP Applied Technologies Company Profile

GCP Applied Technologies Inc. produces and sells specialty construction chemicals, specialty building materials, and packaging sealants and coatings. The Company operates through two segments: Specialty Construction Chemicals and Specialty Building Materials. The Specialty Construction Chemicals segment manufactures and markets products to manage performance of Portland cement, and materials based on Portland cement, such as concrete admixtures and cement additives, as well as concrete production management systems. The Specialty Building Materials segment manufactures and markets building envelope products, residential building products and specialty construction products. Its brands include ADVA, CBA, MIRA, ADPRUFE, DARABLEND and APPERTA.

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