Apogee Enterprises (NASDAQ: APOG) and Quanex Building Products Corporation (NYSE:NX) are both small-cap industrial products companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, profitability, earnings, dividends and valuation.

Dividends

Apogee Enterprises pays an annual dividend of $0.56 per share and has a dividend yield of 1.2%. Quanex Building Products Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.8%. Apogee Enterprises pays out 19.2% of its earnings in the form of a dividend. Quanex Building Products Corporation pays out 42.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Apogee Enterprises is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Apogee Enterprises and Quanex Building Products Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Apogee Enterprises $1.14 billion 1.15 $159.39 million $2.91 15.58
Quanex Building Products Corporation $901.48 million 0.77 $98.42 million $0.38 53.29

Apogee Enterprises has higher revenue and earnings than Quanex Building Products Corporation. Apogee Enterprises is trading at a lower price-to-earnings ratio than Quanex Building Products Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Apogee Enterprises and Quanex Building Products Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apogee Enterprises 0 0 3 0 3.00
Quanex Building Products Corporation 0 0 2 0 3.00

Apogee Enterprises currently has a consensus target price of $63.33, indicating a potential upside of 39.72%. Quanex Building Products Corporation has a consensus target price of $24.00, indicating a potential upside of 18.52%. Given Apogee Enterprises’ higher possible upside, analysts clearly believe Apogee Enterprises is more favorable than Quanex Building Products Corporation.

Institutional & Insider Ownership

99.8% of Quanex Building Products Corporation shares are held by institutional investors. 3.7% of Apogee Enterprises shares are held by insiders. Comparatively, 5.3% of Quanex Building Products Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Apogee Enterprises has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, Quanex Building Products Corporation has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Profitability

This table compares Apogee Enterprises and Quanex Building Products Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apogee Enterprises 7.39% 18.59% 11.53%
Quanex Building Products Corporation 1.52% 7.87% 3.81%

Summary

Apogee Enterprises beats Quanex Building Products Corporation on 12 of the 15 factors compared between the two stocks.

About Apogee Enterprises

Apogee Enterprises, Inc. is engaged in the design and development of glass solutions for enclosing commercial buildings and framing art. The Company operates through four segments: Architectural Glass, Architectural Services, Architectural Framing Systems and Large-Scale Optical Technologies (LSO). The Architectural Glass segment fabricates coated glass used in customized window and wall systems. The Architectural Services segment designs, engineers, fabricates and installs the walls of glass, windows and other curtainwall products making up the outside skin of commercial and institutional buildings. The Architectural Framing Systems segment designs, engineers, fabricates and finishes the aluminum frames used in customized aluminum and glass window, curtainwall, storefront and entrance systems. The Large-Scale Optical Technologies segment manufactures glass and acrylic products for the custom picture framing and fine art markets.

About Quanex Building Products Corporation

Quanex Building Products Corporation manufactures components for original equipment manufacturers (OEM) in the building products industry. The Company’s components can be categorized as window and door (fenestration) components, and kitchen and bath cabinet components. The Company operates through three segments: North American Engineered Components (NA Engineered Components), which consists of four operating segments primarily focused on the fenestration market in North America manufacturing vinyl profiles, insulating glass (IG) spacers, screens and other fenestration components; European Engineered Components (EU Engineered Components), which consists of the United Kingdom-based vinyl extrusion business, manufacturing vinyl profiles and conservatories, and the European insulating glass business manufacturing IG spacers, and North American Cabinet Components (NA Cabinet Components), which consists of the North American cabinet door and components business.

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