Gibraltar Industries (NASDAQ: ROCK) and Nucor Corporation (NYSE:NUE) are both construction companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.

Profitability

This table compares Gibraltar Industries and Nucor Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Gibraltar Industries 3.08% 10.77% 5.46%
Nucor Corporation 5.80% 12.78% 6.87%

Volatility & Risk

Gibraltar Industries has a beta of 1.78, indicating that its share price is 78% more volatile than the S&P 500. Comparatively, Nucor Corporation has a beta of 1.59, indicating that its share price is 59% more volatile than the S&P 500.

Dividends

Nucor Corporation pays an annual dividend of $1.51 per share and has a dividend yield of 2.7%. Gibraltar Industries does not pay a dividend. Nucor Corporation pays out 43.9% of its earnings in the form of a dividend. Gibraltar Industries has increased its dividend for 43 consecutive years.

Earnings and Valuation

This table compares Gibraltar Industries and Nucor Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Gibraltar Industries $1.01 billion 0.96 $33.67 million $0.92 33.15
Nucor Corporation $16.21 billion 1.10 $796.27 million $3.44 16.23

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

Institutional & Insider Ownership

74.8% of Nucor Corporation shares are held by institutional investors. 0.5% of Gibraltar Industries shares are held by company insiders. Comparatively, 0.7% of Nucor Corporation shares are held 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.

Analyst Recommendations

This is a breakdown of current recommendations for Gibraltar Industries and Nucor Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Gibraltar Industries 0 0 2 0 3.00
Nucor Corporation 0 6 9 0 2.60

Gibraltar Industries presently has a consensus price target of $44.50, suggesting a potential upside of 45.90%. Nucor Corporation has a consensus price target of $67.44, suggesting a potential upside of 20.79%. Given Gibraltar Industries’ stronger consensus rating and higher probable upside, analysts plainly believe Gibraltar Industries is more favorable than Nucor Corporation.

Summary

Nucor Corporation beats Gibraltar Industries on 11 of the 17 factors compared between the two stocks.

About Gibraltar Industries

Gibraltar Industries, Inc. is a manufacturer and distributor of building products for industrial, transportation infrastructure, residential housing, renewable energy and resource conservation markets. The Company’s segments include Residential Products; Industrial and Infrastructure Products, and Renewable Energy and Conservation. The Residential Products segment services residential housing construction and residential repair and remodeling activity with products including roof and foundation ventilation products, rain dispersion products and roof ventilation accessories. The Industrial and Infrastructure Products segment focuses on a range of markets, including industrial and commercial construction, automotive, airports and energy and power generation markets with products. The Renewable Energy and Conservation segment focuses on the design, engineering, manufacturing and installation of solar racking systems and commercial, institutional and retail greenhouse structures.

About Nucor Corporation

Nucor Corporation (Nucor) manufactures steel and steel products. The Company produces direct reduced iron (DRI) for use in its steel mills. It operates in three segments: steel mills, steel products and raw materials. The steel mills segment produces and distributes sheet steel (hot-rolled, cold-rolled and galvanized), plate steel, structural steel (wide-flange beams, beam blanks, H-piling and sheet piling) and bar steel (blooms, billets, concrete reinforcing bar, merchant bar, wire rod and special bar quality). The steel products segment produces steel joists and joist girders, steel deck, fabricated concrete reinforcing steel and cold finished steel. The raw materials produces DRI; brokers ferrous and nonferrous metals, pig iron, HBI and DRI; supplies ferro-alloys, and processes ferrous and nonferrous scrap metal. It also processes ferrous and nonferrous metals and brokers ferrous and nonferrous metals, pig iron, hot briquetted iron (HBI) and DRI.

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