Analyzing Advanced Drainage Systems (NYSE:WMS) and Kingspan Group (OTCMKTS:KGSPF)

Kingspan Group (OTCMKTS:KGSPF) and Advanced Drainage Systems (NYSE:WMS) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, institutional ownership, profitability, valuation and earnings.

Profitability

This table compares Kingspan Group and Advanced Drainage Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kingspan Group	N/A	N/A	N/A
Advanced Drainage Systems	14.00%	28.28%	12.30%

Analyst Recommendations

This is a breakdown of current recommendations for Kingspan Group and Advanced Drainage Systems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kingspan Group	0	0	0	0	0.00
Advanced Drainage Systems	0	2	8	0	2.80

Advanced Drainage Systems has a consensus target price of $188.70, indicating a potential upside of 32.57%. Given Advanced Drainage Systems’ stronger consensus rating and higher possible upside, analysts plainly believe Advanced Drainage Systems is more favorable than Kingspan Group.

Earnings & Valuation

This table compares Kingspan Group and Advanced Drainage Systems”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Kingspan Group	N/A	N/A	N/A	$0.57	200.77
Advanced Drainage Systems	$3.05 billion	3.52	$426.46 million	$5.79	24.58

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

Insider & Institutional Ownership

46.6% of Kingspan Group shares are held by institutional investors. Comparatively, 89.8% of Advanced Drainage Systems shares are held by institutional investors. 1.7% of Advanced Drainage Systems shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Kingspan Group pays an annual dividend of $0.09 per share and has a dividend yield of 0.1%. Advanced Drainage Systems pays an annual dividend of $0.80 per share and has a dividend yield of 0.6%. Kingspan Group pays out 15.0% of its earnings in the form of a dividend. Advanced Drainage Systems pays out 13.8% 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. Advanced Drainage Systems has raised its dividend for 1 consecutive years. Advanced Drainage Systems is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Advanced Drainage Systems beats Kingspan Group on 13 of the 14 factors compared between the two stocks.

About Kingspan Group

Kingspan Group plc, together with its subsidiaries, provides insulation and building envelope solutions in Western and Southern Europe, Central and Northern Europe, the Americas, and internationally. It operates through five segments: Insulated Panels, Insulation, Roofing + Waterproofing, Light, Air + Water, and Data + Flooring. The Insulated Panels segment manufactures insulated panels, structural framing, and metal facades. The Insulation segment produces rigid insulation boards, technical insulation, and engineered timber systems. The Roofing + Waterproofing segment produces roofing and waterproofing solutions for renovation and new construction of buildings. The Light, Air + Water segment offers daylighting, smoke management, ventilation systems, and service activities, as well as provides energy and water solutions, and related services. The Data + Flooring segment manufactures data center storage solutions, as well as raised access floors. Kingspan Group plc was founded in 1965 and is based in Kingscourt, Ireland.

About Advanced Drainage Systems

Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products in North America and internationally. The company operates through Pipe, International, Infiltrator, and Allied Products & Other segments. It offers single, double, and triple wall corrugated polypropylene and polyethylene pipes; plastic leachfield chambers and systems; EZflow synthetic aggregate bundles; wastewater purification through mechanical aeration wastewater for residential and commercial systems; septic tanks and accessories; combined treatment and dispersal systems, including advanced enviro-septic and advanced treatment leachfield systems; and allied products, including storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators. The company also purchases and distributes construction fabrics and other geosynthetic products for soil stabilization, reinforcement, filtration, separation, erosion control, and sub-surface drainage, as well as drainage grates and other products. In addition, it provides PVC hubs, rubber sleeves, and stainless-steel bands. The company offers its products for non-residential, residential, agriculture, and infrastructure applications through a network of distribution centers. Advanced Drainage Systems, Inc. incorporated in 1966 and is headquartered in Hilliard, Ohio.