Critical Contrast: Quanex Building Products Corporation (NX) versus Trex (TREX)
Quanex Building Products Corporation (NYSE: NX) and Trex (NYSE:TREX) are both construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitabiliy, valuation, dividends, institutional ownership, risk, earnings and analyst recommendations.
Institutional & Insider Ownership
99.0% of Quanex Building Products Corporation shares are owned by institutional investors. Comparatively, 92.2% of Trex shares are owned by institutional investors. 5.3% of Quanex Building Products Corporation shares are owned by company insiders. Comparatively, 1.0% of Trex shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares Quanex Building Products Corporation and Trex’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Quanex Building Products Corporation||$901.48 million||0.81||$98.42 million||($0.03)||-704.77|
|Trex||$504.24 million||4.61||$131.61 million||$2.58||30.66|
Trex has higher revenue, but lower earnings than Quanex Building Products Corporation. Quanex Building Products Corporation is trading at a lower price-to-earnings ratio than Trex, indicating that it is currently the more affordable of the two stocks.
Quanex Building Products Corporation pays an annual dividend of $0.16 per share and has a dividend yield of 0.8%. Trex does not pay a dividend. Quanex Building Products Corporation pays out -533.2% of its earnings in the form of a dividend.
Risk and Volatility
Quanex Building Products Corporation has a beta of 0.65, indicating that its stock price is 35% less volatile than the S&P 500. Comparatively, Trex has a beta of 2.36, indicating that its stock price is 136% more volatile than the S&P 500.
This is a summary of current ratings for Quanex Building Products Corporation and Trex, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Quanex Building Products Corporation||0||0||3||0||3.00|
Quanex Building Products Corporation presently has a consensus target price of $23.75, indicating a potential upside of 12.29%. Trex has a consensus target price of $71.75, indicating a potential downside of 9.28%. Given Quanex Building Products Corporation’s stronger consensus rating and higher possible upside, equities analysts plainly believe Quanex Building Products Corporation is more favorable than Trex.
This table compares Quanex Building Products Corporation and Trex’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Quanex Building Products Corporation||-0.09%||7.70%||3.64%|
Quanex Building Products Corporation Company Profile
Quanex Building Products Corporation manufactures components for original equipment manufacturers (OEM) in the building products industry. The Company’s components can be categorized as window and door (fenestration) components, and kitchen and bath cabinet components. The Company operates through three segments: North American Engineered Components (NA Engineered Components), which consists of four operating segments primarily focused on the fenestration market in North America manufacturing vinyl profiles, insulating glass (IG) spacers, screens and other fenestration components; European Engineered Components (EU Engineered Components), which consists of the United Kingdom-based vinyl extrusion business, manufacturing vinyl profiles and conservatories, and the European insulating glass business manufacturing IG spacers, and North American Cabinet Components (NA Cabinet Components), which consists of the North American cabinet door and components business.
Trex Company Profile
Trex Company, Inc. is a manufacturer of wood-alternative decking and railing products. The Company’s products are marketed under the brand name Trex and are manufactured in the United States. It offers a set of outdoor living products in the decking, railing, porch, fencing, trim, steel deck framing and outdoor lighting categories. Its decking products include Trex Transcend, Trex Enhance and Trex Select. The Company’s railing products include Trex Transcend Railing, Trex Select Railing and Trex Signature aluminum railing. It offers Trex Transcend Porch Flooring and Railing System, which is an integrated system of porch components and accessories. The Company offers Trex Seclusions fencing product, which consists of structural posts, bottom rail, pickets, top rail and decorative post caps. It offers a triple-coated steel deck framing system called Trex Elevations. The Company also offers outdoor lighting systems, such as Trex DeckLighting and Trex Landscape Lighting.
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