Analyzing Trex (TREX) & The Competition

Trex (NYSE:TREX) is one of 93 public companies in the “Building Products” industry, but how does it contrast to its peers? We will compare Trex to similar companies based on the strength of its profitability, institutional ownership, earnings, risk, valuation, dividends and analyst recommendations.

Earnings & Valuation

This table compares Trex and its peers revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Trex	$1.17 billion	$190.41 million	31.70
Trex Competitors	$4.00 billion	$4.65 billion	37.87

Trex’s peers have higher revenue and earnings than Trex. Trex is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Institutional and Insider Ownership

96.0% of Trex shares are owned by institutional investors. Comparatively, 63.6% of shares of all “Building Products” companies are owned by institutional investors. 0.9% of Trex shares are owned by company insiders. Comparatively, 10.2% of shares of all “Building Products” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Trex and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trex	1	6	12	0	2.58
Trex Competitors	741	3940	5071	241	2.48

Trex presently has a consensus price target of $55.18, indicating a potential upside of 1.18%. As a group, “Building Products” companies have a potential upside of 26.59%. Given Trex’s peers higher possible upside, analysts clearly believe Trex has less favorable growth aspects than its peers.

Risk & Volatility

Trex has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500. Comparatively, Trex’s peers have a beta of 1.07, meaning that their average share price is 7% more volatile than the S&P 500.

Profitability

This table compares Trex and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trex	13.89%	18.27%	11.60%
Trex Competitors	3.97%	-37.99%	5.06%

Summary

Trex beats its peers on 7 of the 13 factors compared.

Trex Company Profile

Trex Company, Inc. manufactures wood-alternative decking, railing and other outdoor-living products. Its composite decking is made primarily from reclaimed wood and recycled plastic, offering an alternative to traditional wood materials. The company’s products include composite deck boards and railing systems, along with accessories such as outdoor lighting and drainage products. Trex sells through a network of distributors, dealers and retailers, serving customers primarily in North America as well as international markets.