USG Corporation (NYSE: USG) and Forterra (NASDAQ:FRTA) are both construction companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and price targets for USG Corporation and Forterra, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
USG Corporation 2 12 1 0 1.93
Forterra 0 6 3 0 2.33

USG Corporation currently has a consensus price target of $30.93, suggesting a potential downside of 8.33%. Forterra has a consensus price target of $14.06, suggesting a potential upside of 180.69%. Given Forterra’s stronger consensus rating and higher probable upside, analysts clearly believe Forterra is more favorable than USG Corporation.

Profitability

This table compares USG Corporation and Forterra’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
USG Corporation 14.94% 13.57% 6.20%
Forterra -4.72% -45.03% -3.19%

Insider and Institutional Ownership

86.9% of USG Corporation shares are owned by institutional investors. Comparatively, 99.7% of Forterra shares are owned by institutional investors. 0.7% of USG Corporation shares are owned by insiders. Comparatively, 0.3% of Forterra shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares USG Corporation and Forterra’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
USG Corporation $3.08 billion 1.57 $487.00 million $3.10 10.88
Forterra $1.57 billion 0.20 $160.18 million N/A N/A

USG Corporation has higher revenue and earnings than Forterra.

Summary

USG Corporation beats Forterra on 7 of the 11 factors compared between the two stocks.

About USG Corporation

USG Corporation, through its subsidiaries, is a manufacturer and distributor of building materials. The Company’s segments include Gypsum, Ceilings and USG Boral Building Products (UBBP). It produces a range of products for use in new residential, new nonresidential, and residential and nonresidential repair and remodel construction, as well as products used in certain industrial processes. Its products are distributed through building materials dealers, home improvement centers and other retailers, specialty wallboard distributors, and contractors. Gypsum segment manufactures and markets gypsum and related products in the United States, Canada, Mexico and Latin America. Ceilings segment manufactures and markets interior systems products in the United States, Canada, Mexico and Latin America. The UBBP segment manufactures, distributes and sells certain building products, mines raw gypsum and sells natural and synthetic gypsum throughout Asia, Australasia and the Middle East.

About Forterra

Forterra, Inc. is a manufacturer of pipe and precast products. The Company offers products for a range of water-related infrastructure applications, including water transmission, distribution and drainage. The Company operates approximately 95 facilities. Its products are available in the United States and Eastern Canada.

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