Financial Contrast: Owens Corning (NYSE:OC) vs. TopBuild (NYSE:BLD)

Owens Corning (NYSE:OC) and TopBuild (NYSE:BLD) are both construction companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations for Owens Corning and TopBuild, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Owens Corning	1	6	8	1	2.56
TopBuild	0	9	5	1	2.47

Owens Corning currently has a consensus price target of $143.27, suggesting a potential upside of 17.52%. TopBuild has a consensus price target of $466.77, suggesting a potential upside of 8.95%. Given Owens Corning’s stronger consensus rating and higher possible upside, equities analysts clearly believe Owens Corning is more favorable than TopBuild.

Volatility and Risk

Owens Corning has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, TopBuild has a beta of 1.85, indicating that its share price is 85% more volatile than the S&P 500.

Earnings and Valuation

This table compares Owens Corning and TopBuild”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Owens Corning	$10.10 billion	0.97	-$522.00 million	($6.40)	-19.05
TopBuild	$5.62 billion	2.14	$521.73 million	$17.80	24.07

TopBuild has lower revenue, but higher earnings than Owens Corning. Owens Corning is trading at a lower price-to-earnings ratio than TopBuild, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Owens Corning and TopBuild’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Owens Corning	-5.43%	19.86%	6.32%
TopBuild	8.95%	23.53%	8.61%

Institutional and Insider Ownership

88.4% of Owens Corning shares are owned by institutional investors. Comparatively, 95.7% of TopBuild shares are owned by institutional investors. 0.9% of Owens Corning shares are owned by insiders. Comparatively, 0.5% of TopBuild shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

TopBuild beats Owens Corning on 9 of the 14 factors compared between the two stocks.

About Owens Corning

Owens Corning manufactures and sells building and construction materials in the United States, Europe, the Asia Pacific, and internationally. It operates in three segments: Roofing, Insulation, and Composites. The Roofing segment manufactures and sells laminate and strip asphalt roofing shingles, oxidized asphalt materials, and roofing components used in residential and commercial construction, and specialty applications. This segment sells its products through distributors, home centers, and lumberyards, as well as to roofing contractors for built-up roofing asphalt systems; and manufacturers in automotive, chemical, rubber, and construction industries. The Insulation segment manufactures and sells thermal and acoustical batts, loosefill insulation, spray foam insulation, foam sheathing and accessories under the Owens Corning PINK, and FIBERGLAS brands; and glass fiber pipe insulation, energy efficient flexible duct media, bonded and granulated mineral wool insulation, cellular glass insulation, and foam insulation under the FOAMULAR, FOAMGLAS, and Paroc brand names used in construction applications. This segment sells its products primarily to the insulation installers, home centers, lumberyards, retailers, and distributors. The Composites segment manufactures, fabricates, and sells glass reinforcements in the form of fiber; and glass fiber products in the form of fabrics, non-wovens, and composite lumber. Its products are used in building structures, roofing shingles, tubs and showers, pools, decking, flooring, pipes and tanks, poles, electrical equipment, and wind-energy turbine blades. This segment sells its products directly to parts molders, fabricators, and shingle manufacturers. The company was incorporated in 1938 and is headquartered in Toledo, Ohio.

About TopBuild

TopBuild Corp., together with its subsidiaries, engages in the installation and distribution of insulation and other building material products to the construction industry. The company operates in two segments, Installation and Specialty Distribution. It provides insulation products and accessories, glass and windows, rain gutters, garage doors, fireplaces, roofing materials, closet shelving, and other products. The company also offers insulation installation services for fiberglass batts and rolls, blown-in loose fill fiberglass, polyurethane spray foam, and blown-in loose fill cellulose applications. In addition, it distributes building and mechanical insulation, insulation accessories, and other building product materials for the residential, commercial, and industrial end markets. The company serves single-family homebuilders, single-family custom builders, multi-family builders, commercial general contractors, remodelers, and individual homeowners, as well as insulation contractors, gutter contractors, weatherization contractors, other contractors, dealers, metal building erectors, and modular home builders. It operates installation branches and distribution centers in the United States and Canada. The company was formerly known as Masco SpinCo Corp. and changed its name to TopBuild Corp. in March 2015. TopBuild Corp. was incorporated in 2015 and is headquartered in Daytona Beach, Florida.