Masco Corporation (NYSE: MAS) and Simpson Manufacturing (NYSE:SSD) are both mid-cap construction companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, valuation, risk, earnings and profitability.

Volatility and Risk

Masco Corporation has a beta of 1.54, meaning that its share price is 54% more volatile than the S&P 500. Comparatively, Simpson Manufacturing has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Masco Corporation and Simpson Manufacturing, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Masco Corporation 0 3 11 0 2.79
Simpson Manufacturing 0 1 0 0 2.00

Masco Corporation presently has a consensus target price of $40.75, indicating a potential upside of 1.65%. Simpson Manufacturing has a consensus target price of $46.00, indicating a potential downside of 7.22%. Given Masco Corporation’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Masco Corporation is more favorable than Simpson Manufacturing.

Earnings & Valuation

This table compares Masco Corporation and Simpson Manufacturing’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Masco Corporation $7.47 billion 1.71 $1.23 billion $1.62 24.75
Simpson Manufacturing $914.03 million 2.56 $171.24 million $2.05 24.19

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

Dividends

Masco Corporation pays an annual dividend of $0.42 per share and has a dividend yield of 1.0%. Simpson Manufacturing pays an annual dividend of $0.84 per share and has a dividend yield of 1.7%. Masco Corporation pays out 25.9% of its earnings in the form of a dividend. Simpson Manufacturing pays out 41.0% 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. Masco Corporation has increased its dividend for 3 consecutive years and Simpson Manufacturing has increased its dividend for 3 consecutive years.

Institutional and Insider Ownership

88.3% of Masco Corporation shares are owned by institutional investors. Comparatively, 83.6% of Simpson Manufacturing shares are owned by institutional investors. 1.3% of Masco Corporation shares are owned by company insiders. Comparatively, 0.4% of Simpson Manufacturing 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 Masco Corporation and Simpson Manufacturing’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Masco Corporation 7.09% 20,509.09% 10.67%
Simpson Manufacturing 10.78% 10.26% 8.96%

Summary

Masco Corporation beats Simpson Manufacturing on 11 of the 16 factors compared between the two stocks.

About Masco Corporation

Masco Corporation designs, manufactures, markets and distributes branded home improvement and building products. The Company operates through four business segments: Plumbing Products, Decorative Architectural Products, Cabinetry Products, and Windows and Other Specialty Products. The Company’s portfolio of brands includes BEHR paint; DELTA and HANSGROHE faucets, bath and shower fixtures; KRAFTMAID and MERILLAT cabinets; MILGARD windows and doors, and HOT SPRING spas. The Company’s plumbing products include faucets, showerheads, handheld showers, valves, bathing units, shower enclosures and toilets and are sold to home center retailers and to wholesalers and distributors. It also produces architectural coatings, including paints, primers, specialty paints, stains and waterproofing products. In North America, it manufactures and sells value-priced, stock and semi-custom assembled cabinetry for kitchen, bath, storage, home office and home entertainment applications.

About Simpson Manufacturing

Simpson Manufacturing Co., Inc., through its subsidiary, Simpson Strong-Tie Company Inc. (SST), designs, engineers and manufactures wood construction products, including connectors, truss plates, fastening systems, fasteners and pre-fabricated lateral systems used in light-frame construction. The Company’s segments are North America, Europe, Asia/Pacific, and Administrative & All Other. The North America segment includes operations primarily in the United States and Canada. The Europe segment includes operations primarily in France, the United Kingdom, Germany, Denmark, Switzerland, Portugal, Poland, the Netherlands and Belgium. The Asia/Pacific segment includes operations primarily in Australia, New Zealand, South Africa, China, Taiwan and Vietnam. The Company manufactures concrete construction products used for concrete, masonry, steel construction and for concrete repair, protection and strengthening, including adhesives, chemicals and mechanical anchors.

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