Analyzing Trex (NYSE:TREX) and Nature Wood Group (NASDAQ:NWGL)

Nature Wood Group (NASDAQ:NWGL) and Trex (NYSE:TREX) are both construction companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, profitability, analyst recommendations, risk, institutional ownership and dividends.

Valuation and Earnings

This table compares Nature Wood Group and Trex”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nature Wood Group	$21.54 million	0.96	-$8.73 million	N/A	N/A
Trex	$1.18 billion	3.00	$226.39 million	$1.84	17.98

Trex has higher revenue and earnings than Nature Wood Group.

Insider & Institutional Ownership

96.0% of Trex shares are held by institutional investors. 0.7% of Trex shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings for Nature Wood Group and Trex, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nature Wood Group	1	0	0	0	1.00
Trex	4	12	6	1	2.17

Trex has a consensus price target of $52.53, suggesting a potential upside of 58.78%. Given Trex’s stronger consensus rating and higher probable upside, analysts plainly believe Trex is more favorable than Nature Wood Group.

Volatility & Risk

Nature Wood Group has a beta of 1.88, indicating that its share price is 88% more volatile than the S&P 500. Comparatively, Trex has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.

Profitability

This table compares Nature Wood Group and Trex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nature Wood Group	N/A	N/A	N/A
Trex	16.53%	21.27%	13.41%

Summary

Trex beats Nature Wood Group on 12 of the 13 factors compared between the two stocks.

About Nature Wood Group

Nature Wood Group Limited, an integrated forestry company, engages in management and harvesting, and down-stream wood-processing and distribution activities. It operates in two divisions, Direct Purchase and Original Design Manufacturer Services; and Manufacturing segments. The company offers a range of products, including logs, decking and flooring products, sawn timber, recycled and synthesized charcoal, machine-made charcoal, and essential oils. It provides IT and business consultancy services. The company serves importers, retailers, and processors through its sales network in Europe, South Asia, South America, North America, and China. The company was formerly known as China Nature Wood Industry Group Limited and changed its name to Nature Wood Group Limited in September 2022. The company was incorporated in 2011 and is headquartered in Macau. Nature Wood Group Limited operates as a subsidiary of Easy Bliss Limited.

About Trex

Trex Company, Inc. manufactures and distributes composite decking, railing, and outdoor living products and accessories for residential and commercial markets in the United States. It offers decking products and accessories under the names Trex Transcend, Trex Select, Trex Signature, Trex Transcend Lineage, and Trex Enhance for protection against fading, staining, mold, and scratching; Trex Hideaway, a hidden fastening system; and Trex DeckLighting, a LED dimmable deck lighting for use on posts, floors, and steps. The company also provides Trex Transcend Railing products that are used in Trex decking products and other decking materials; Trex Select Railing products for a simple clean finished look; Trex Enhance Railing system; Trex Signature aluminum railing for a contemporary look; and Trex Select T-Rail railing products. In addition, it offers Trex Seclusions, a fencing product that includes structural posts, bottom and top rails, pickets, and decorative post caps. Further, the company acts as a licensor in various licensing agreements with third parties to manufacture and sell products under the Trex name, including Trex Outdoor Furniture; Trex RainEscape, an above joist deck drainage system; Trex Pergola, a cellular PVC product; Trex Latticeworks outdoor lattice boards; Trex Cornhole boards; Diablo Trex Blade, a saw blade for wood-alternative composite decking; Trex SpiralStairs and structural steel posts; and Trex Outdoor Kitchens, cabinetry, and Storage products. It sells its products through wholesale distributors, retail lumber dealers, and Home Depot and Lowe’s stores. Trex Company, Inc. was founded in 1996 and is headquartered in Winchester, Virginia.