Analyzing Latham Group (NASDAQ:SWIM) and Frontdoor (NASDAQ:FTDR)

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Latham Group and Frontdoor, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Latham Group	2	3	2	0	2.00
Frontdoor	0	3	3	1	2.71

Latham Group presently has a consensus price target of $7.50, suggesting a potential upside of 42.05%. Frontdoor has a consensus price target of $68.60, suggesting a potential upside of 10.52%. Given Latham Group’s higher possible upside, equities research analysts clearly believe Latham Group is more favorable than Frontdoor.

Institutional & Insider Ownership

84.0% of Latham Group shares are owned by institutional investors. 3.3% of Latham Group shares are owned by insiders. Comparatively, 1.6% of Frontdoor shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Latham Group has a beta of 1.67, suggesting that its stock price is 67% more volatile than the S&P 500. Comparatively, Frontdoor has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500.

Valuation & Earnings

This table compares Latham Group and Frontdoor”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Latham Group	$545.91 million	1.14	$11.12 million	$0.07	75.43
Frontdoor	$2.09 billion	2.08	$255.00 million	$3.49	17.79

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Latham Group	1.55%	2.13%	1.02%
Frontdoor	12.22%	118.62%	14.20%

Summary

Frontdoor beats Latham Group on 10 of the 15 factors compared between the two stocks.

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.

About Frontdoor

Frontdoor, Inc. provides home warranties in the United States in the United States. Its customizable home warranties help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances. The company’s home warranty customers subscribe to an annual service plan agreement that covers the repair or replacement of principal components of approximately 20 home systems and appliances, including electrical, plumbing, water heaters, refrigerators, dishwashers, and ranges/ovens/cooktops, as well as electronics, pools, and spas and pumps; and heating, ventilation, and air conditioning systems. It also offers on-demand home services and a one-stop app experience for home repair and maintenance; and Streem technology, an app that empowers homeowners by connecting them in real time through video chat with qualified experts to diagnose and solve their problems. The company serves homeowners under the Frontdoor, American Home Shield, HSA, OneGuard, Landmark Home Warranty, Frontdoor logo, and Streem brands. The company was founded in 1971 and is headquartered in Memphis, Tennessee.