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

Valuation and Earnings

This table compares Texas Industries and USG Corporation’s 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
USG Corporation $3.08 billion 1.56 $487.00 million $3.10 10.82

USG Corporation has higher revenue and earnings than Texas Industries.

Analyst Recommendations

This is a summary of current recommendations and price targets for Texas Industries and USG Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Texas Industries 0 1 0 0 2.00
USG Corporation 2 12 1 0 1.93

Texas Industries presently has a consensus target price of $82.00, suggesting a potential downside of 10.97%. USG Corporation has a consensus target price of $30.93, suggesting a potential downside of 7.76%. Given USG Corporation’s higher possible upside, analysts clearly believe USG Corporation is more favorable than Texas Industries.

Insider and Institutional Ownership

85.7% of USG Corporation shares are held by institutional investors. 0.7% of USG Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Texas Industries and USG Corporation’s 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
USG Corporation 14.94% 13.57% 6.20%

Summary

USG Corporation 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.

USG Corporation Company Profile

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.

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