Head to Head Comparison: Simpson Manufacturing (SSD) vs. Valmont Industries (VMI)
Simpson Manufacturing (NYSE: SSD) and Valmont Industries (NYSE:VMI) are both mid-cap construction companies, but which is the better business? We will compare the two companies based on the strength of their valuation, earnings, dividends, analyst recommendations, risk, profitability and institutional ownership.
This is a breakdown of current ratings and target prices for Simpson Manufacturing and Valmont Industries, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Valmont Industries has a consensus price target of $165.50, suggesting a potential upside of 6.14%. Given Valmont Industries’ higher possible upside, analysts plainly believe Valmont Industries is more favorable than Simpson Manufacturing.
Volatility and Risk
Simpson Manufacturing has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, Valmont Industries has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.
Simpson Manufacturing pays an annual dividend of $0.84 per share and has a dividend yield of 1.8%. Valmont Industries pays an annual dividend of $1.50 per share and has a dividend yield of 1.0%. Simpson Manufacturing pays out 41.0% of its earnings in the form of a dividend. Valmont Industries pays out 18.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Simpson Manufacturing has raised its dividend for 3 consecutive years. Simpson Manufacturing is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation & Earnings
This table compares Simpson Manufacturing and Valmont Industries’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Simpson Manufacturing||$914.03 million||2.47||$171.24 million||$2.05||23.34|
|Valmont Industries||$2.64 billion||1.33||$344.67 million||$8.07||19.32|
Valmont Industries has higher revenue and earnings than Simpson Manufacturing. Valmont Industries is trading at a lower price-to-earnings ratio than Simpson Manufacturing, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
83.6% of Simpson Manufacturing shares are owned by institutional investors. Comparatively, 83.6% of Valmont Industries shares are owned by institutional investors. 0.4% of Simpson Manufacturing shares are owned by insiders. Comparatively, 3.3% of Valmont Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This table compares Simpson Manufacturing and Valmont Industries’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Simpson Manufacturing Company Profile
Simpson Manufacturing Co., Inc., through its subsidiary, Simpson Strong-Tie Company Inc. (SST), designs, engineers and manufactures wood construction products, including connectors, truss plates, fastening systems, fasteners and pre-fabricated lateral systems used in light-frame construction. The Company’s segments are North America, Europe, Asia/Pacific, and Administrative & All Other. The North America segment includes operations primarily in the United States and Canada. The Europe segment includes operations primarily in France, the United Kingdom, Germany, Denmark, Switzerland, Portugal, Poland, the Netherlands and Belgium. The Asia/Pacific segment includes operations primarily in Australia, New Zealand, South Africa, China, Taiwan and Vietnam. The Company manufactures concrete construction products used for concrete, masonry, steel construction and for concrete repair, protection and strengthening, including adhesives, chemicals and mechanical anchors.
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.
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