GCP Applied Technologies (NYSE: GCP) and USG Corporation (NYSE:USG) are both mid-cap construction companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, valuation, profitabiliy, earnings, dividends, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares GCP Applied Technologies and USG Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
GCP Applied Technologies $1.34 billion 1.64 $214.90 million $0.04 765.00
USG Corporation $3.08 billion 1.29 $487.00 million $3.10 8.92

USG Corporation has higher revenue and earnings than GCP Applied Technologies. USG Corporation is trading at a lower price-to-earnings ratio than GCP Applied Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for GCP Applied Technologies and USG Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GCP Applied Technologies 0 0 4 0 3.00
USG Corporation 2 11 5 0 2.17

GCP Applied Technologies presently has a consensus target price of $35.50, indicating a potential upside of 16.01%. USG Corporation has a consensus target price of $31.00, indicating a potential upside of 12.12%. Given GCP Applied Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe GCP Applied Technologies is more favorable than USG Corporation.

Profitability

This table compares GCP Applied Technologies and USG Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GCP Applied Technologies 0.26% -44.32% 5.24%
USG Corporation 14.94% 13.57% 6.20%

Insider & Institutional Ownership

81.6% of GCP Applied Technologies shares are owned by institutional investors. Comparatively, 90.0% of USG Corporation shares are owned by institutional investors. 0.7% of GCP Applied Technologies shares are owned by company insiders. Comparatively, 0.7% of USG Corporation shares are owned by company 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.

Risk and Volatility

GCP Applied Technologies has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500. Comparatively, USG Corporation has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500.

Summary

USG Corporation beats GCP Applied Technologies on 10 of the 14 factors compared between the two stocks.

GCP Applied Technologies Company Profile

GCP Applied Technologies Inc. produces and sells specialty construction chemicals, specialty building materials, and packaging sealants and coatings. The Company operates through two segments: Specialty Construction Chemicals and Specialty Building Materials. The Specialty Construction Chemicals segment manufactures and markets products to manage performance of Portland cement, and materials based on Portland cement, such as concrete admixtures and cement additives, as well as concrete production management systems. The Specialty Building Materials segment manufactures and markets building envelope products, residential building products and specialty construction products. Its brands include ADVA, CBA, MIRA, ADPRUFE, DARABLEND and APPERTA.

USG Corporation Company Profile

USG Corporation, through its subsidiaries, is a manufacturer and distributor of building materials. The Company’s segments include Gypsum, Ceilings and USG Boral Building Products (UBBP). It produces a range of products for use in new residential, new nonresidential, and residential and nonresidential repair and remodel construction, as well as products used in certain industrial processes. Its products are distributed through building materials dealers, home improvement centers and other retailers, specialty wallboard distributors, and contractors. Gypsum segment manufactures and markets gypsum and related products in the United States, Canada, Mexico and Latin America. Ceilings segment manufactures and markets interior systems products in the United States, Canada, Mexico and Latin America. The UBBP segment manufactures, distributes and sells certain building products, mines raw gypsum and sells natural and synthetic gypsum throughout Asia, Australasia and the Middle East.

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