Comparing James Hardie Industries (NYSE:JHX) and Latham Group (NASDAQ:SWIM)

James Hardie Industries (NYSE:JHX) and Latham Group (NASDAQ:SWIM) are both construction companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, profitability, valuation, dividends and risk.

Insider and Institutional Ownership

8.0% of James Hardie Industries shares are held by institutional investors. Comparatively, 84.0% of Latham Group shares are held by institutional investors. 6.9% of Latham Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares James Hardie Industries and Latham Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
James Hardie Industries	4.67%	18.40%	7.62%
Latham Group	-2.07%	-2.80%	-1.34%

Analyst Recommendations

This is a summary of current ratings and target prices for James Hardie Industries and Latham Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
James Hardie Industries	0	4	11	1	2.81
Latham Group	2	1	0	0	1.33

James Hardie Industries currently has a consensus target price of $25.93, suggesting a potential upside of 23.25%. Latham Group has a consensus target price of $7.44, suggesting a potential upside of 17.31%. Given James Hardie Industries’ stronger consensus rating and higher possible upside, research analysts clearly believe James Hardie Industries is more favorable than Latham Group.

Valuation & Earnings

This table compares James Hardie Industries and Latham Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
James Hardie Industries	$3.88 billion	2.33	$424.00 million	$0.48	43.83
Latham Group	$508.52 million	1.45	-$17.86 million	($0.10)	-63.40

James Hardie Industries has higher revenue and earnings than Latham Group. Latham Group is trading at a lower price-to-earnings ratio than James Hardie Industries, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

James Hardie Industries has a beta of 1.8, suggesting that its share price is 80% more volatile than the S&P 500. Comparatively, Latham Group has a beta of 1.71, suggesting that its share price is 71% more volatile than the S&P 500.

Summary

James Hardie Industries beats Latham Group on 13 of the 15 factors compared between the two stocks.

About James Hardie Industries

James Hardie Industries plc manufactures and sells fiber cement, fiber gypsum, and cement bonded building products for interior and exterior building construction applications primarily in the United States, Australia, Europe, New Zealand, and the Philippines. The company operates through North America Fiber Cement, Asia Pacific Fiber Cement, and Europe Building Products segments. It offers fiber cement interior linings, exterior siding products, and related accessories; and various fiber cement products for a range of applications, including external cladding, internal walls, ceilings, floors, soffits, fences, and facades. The company also provides fiber gypsum and cement-bonded boards for use in the timber frame construction, dry lining, DIY, and structural fire protection applications. Its products are used in residential repair and remodel, and commercial and residential new construction markets James Hardie Industries plc was founded in 1888 and is based in Dublin, Ireland.

About Latham Group

Latham Group, Inc. designs, manufactures, and markets in-ground residential swimming pools in North America, Australia, and New Zealand. It offers a portfolio of pools and related products, including in-ground swimming pools that include fiber glass and packaged pools; and pool covers and liners under the Latham, Narellan, CoverStar, Radiant, and GLI brand names. The company was formerly known as Latham Topco, Inc. and changed its name to Latham Group, Inc. in March 2021. Latham Group, Inc. was founded in 1956 and is headquartered in Latham, New York.