Valmont Industries (NYSE: VMI) and Headwaters (NYSE:HW) are both industrial products companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, risk, valuation and profitabiliy.

Dividends

Valmont Industries pays an annual dividend of $1.50 per share and has a dividend yield of 1.0%. Headwaters does not pay a dividend. Valmont Industries pays out 18.6% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current recommendations for Valmont Industries and Headwaters, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Valmont Industries 0 2 1 0 2.33
Headwaters 1 7 1 0 2.00

Valmont Industries currently has a consensus target price of $171.00, suggesting a potential upside of 13.10%. Headwaters has a consensus target price of $23.44, suggesting a potential downside of 3.31%. Given Valmont Industries’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Valmont Industries is more favorable than Headwaters.

Volatility and Risk

Valmont Industries has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500. Comparatively, Headwaters has a beta of 1.7, suggesting that its stock price is 70% more volatile than the S&P 500.

Profitability

This table compares Valmont Industries and Headwaters’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Valmont Industries 6.94% 14.89% 6.29%
Headwaters 1.98% 5.96% 1.68%

Valuation & Earnings

This table compares Valmont Industries and Headwaters’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Valmont Industries $2.64 billion 1.29 $344.67 million $8.07 18.74
Headwaters N/A N/A N/A $0.56 43.29

Valmont Industries has higher revenue and earnings than Headwaters. Valmont Industries is trading at a lower price-to-earnings ratio than Headwaters, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

85.0% of Valmont Industries shares are owned by institutional investors. Comparatively, 86.8% of Headwaters shares are owned by institutional investors. 3.3% of Valmont Industries shares are owned by company insiders. Comparatively, 6.4% of Headwaters shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Valmont Industries beats Headwaters on 8 of the 12 factors compared between the two stocks.

Valmont Industries Company Profile

Valmont Industries, Inc. is a producer of fabricated metal products, and steel, aluminum and composite pole, tower and other structures, and mechanized irrigation systems. The Company’s segments are Engineered Support Structures (ESS); Utility Support Structures; Energy and Mining; Coatings; Irrigation, and Other. The ESS segment manufactures steel, aluminum, and composite poles and structures. The Utility Support Structures Segment manufactures steel and concrete pole structures for electrical transmission, substation and distribution applications. The Energy and Mining Segment produces access systems, which are engineered structures and components that allow people to move safely in an industrial, infrastructure or commercial facility. The Coatings Segment consists of galvanizing, anodizing and powder coating services on a global basis. The Irrigation Segment manufactures and distributes mechanical irrigation equipment and related service parts under the Valley brand name.

Headwaters Company Profile

Headwaters Incorporated is a building materials company operating in the building products and construction materials sectors. The Company sells building products, such as manufactured architectural stone, siding accessory products, roof products and concrete block. The Company’s operating segments include building products, construction materials and energy technology. It also markets coal combustion products (CCPs), including fly ash, which is used as a partial replacement for Portland cement in concrete. The Building Products segment is engaged in designing, manufacturing and marketing of siding accessories used in residential repair and remodeling, and new residential construction applications. The Materials segment markets fly ash in the construction materials sector. The Energy Technology segment is involved in heavy oil upgrading processes through the sale of its HCAT catalyst material. It sells catalytic materials to certain refineries engaged in heavy oil upgrading.

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