Advanced Drainage Systems (NYSE:WMS) & James Hardie Industries (NYSE:JHX) Head to Head Comparison

Advanced Drainage Systems (NYSE:WMS) and James Hardie Industries (NYSE:JHX) are both construction companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.

Analyst Recommendations

This is a summary of current recommendations for Advanced Drainage Systems and James Hardie Industries, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Advanced Drainage Systems	0	2	8	0	2.80
James Hardie Industries	0	2	11	2	3.00

Advanced Drainage Systems presently has a consensus price target of $156.56, suggesting a potential upside of 2.74%. James Hardie Industries has a consensus price target of $27.42, suggesting a potential upside of 38.62%. Given James Hardie Industries’ stronger consensus rating and higher possible upside, analysts clearly believe James Hardie Industries is more favorable than Advanced Drainage Systems.

Profitability

This table compares Advanced Drainage Systems and James Hardie Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Advanced Drainage Systems	14.82%	29.57%	12.23%
James Hardie Industries	8.75%	27.95%	10.84%

Dividends

Advanced Drainage Systems pays an annual dividend of $0.72 per share and has a dividend yield of 0.5%. James Hardie Industries pays an annual dividend of $0.21 per share and has a dividend yield of 1.1%. Advanced Drainage Systems pays out 12.3% of its earnings in the form of a dividend. James Hardie Industries pays out 43.7% 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.

Institutional and Insider Ownership

89.8% of Advanced Drainage Systems shares are owned by institutional investors. Comparatively, 8.0% of James Hardie Industries shares are owned by institutional investors. 1.6% of Advanced Drainage Systems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Advanced Drainage Systems has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500. Comparatively, James Hardie Industries has a beta of 1.82, meaning that its stock price is 82% more volatile than the S&P 500.

Valuation and Earnings

This table compares Advanced Drainage Systems and James Hardie Industries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Advanced Drainage Systems	$2.99 billion	3.97	$450.17 million	$5.86	26.00
James Hardie Industries	$4.12 billion	2.07	$424.00 million	$0.48	41.21

Advanced Drainage Systems has higher earnings, but lower revenue than James Hardie Industries. Advanced Drainage Systems 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.

Summary

Advanced Drainage Systems beats James Hardie Industries on 11 of the 18 factors compared between the two stocks.

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.

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.