Head-To-Head Analysis: Advanced Drainage Systems (NYSE:WMS) vs. CRH (NYSE:CRH)

Advanced Drainage Systems (NYSE:WMS) and CRH (NYSE:CRH) are both large-cap construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitability, earnings, dividends and risk.

Dividends

Advanced Drainage Systems pays an annual dividend of $0.72 per share and has a dividend yield of 0.5%. CRH pays an annual dividend of $1.11 per share and has a dividend yield of 0.9%. Advanced Drainage Systems pays out 12.3% of its earnings in the form of a dividend. CRH pays out 22.1% 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. Advanced Drainage Systems has increased its dividend for 1 consecutive years.

Valuation & Earnings

This table compares Advanced Drainage Systems and CRH”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Advanced Drainage Systems	$2.99 billion	3.90	$450.17 million	$5.86	25.55
CRH	$35.57 billion	2.38	$3.46 billion	$5.02	25.21

CRH has higher revenue and earnings than Advanced Drainage Systems. CRH is trading at a lower price-to-earnings ratio than Advanced Drainage Systems, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Advanced Drainage Systems has a beta of 1.36, meaning that its share price is 36% more volatile than the S&P 500. Comparatively, CRH has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Advanced Drainage Systems and CRH, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Advanced Drainage Systems	0	2	8	0	2.80
CRH	0	2	14	1	2.94

Advanced Drainage Systems currently has a consensus price target of $157.11, indicating a potential upside of 4.95%. CRH has a consensus price target of $130.64, indicating a potential upside of 3.25%. Given Advanced Drainage Systems’ higher probable upside, research analysts plainly believe Advanced Drainage Systems is more favorable than CRH.

Profitability

This table compares Advanced Drainage Systems and CRH’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Advanced Drainage Systems	15.35%	28.85%	12.36%
CRH	9.30%	16.25%	6.94%

Institutional & Insider Ownership

89.8% of Advanced Drainage Systems shares are held by institutional investors. Comparatively, 62.5% of CRH shares are held by institutional investors. 1.6% of Advanced Drainage Systems shares are held by company insiders. Comparatively, 0.1% of CRH shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Advanced Drainage Systems beats CRH on 12 of the 18 factors compared between the two stocks.

About Advanced Drainage Systems

Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products in North America and internationally. The company operates through Pipe, International, Infiltrator, and Allied Products & Other segments. It offers single, double, and triple wall corrugated polypropylene and polyethylene pipes; plastic leachfield chambers and systems; EZflow synthetic aggregate bundles; wastewater purification through mechanical aeration wastewater for residential and commercial systems; septic tanks and accessories; combined treatment and dispersal systems, including advanced enviro-septic and advanced treatment leachfield systems; and allied products, including storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators. The company also purchases and distributes construction fabrics and other geosynthetic products for soil stabilization, reinforcement, filtration, separation, erosion control, and sub-surface drainage, as well as drainage grates and other products. In addition, it provides PVC hubs, rubber sleeves, and stainless-steel bands. The company offers its products for non-residential, residential, agriculture, and infrastructure applications through a network of distribution centers. Advanced Drainage Systems, Inc. incorporated in 1966 and is headquartered in Hilliard, Ohio.

About CRH

CRH plc, together with its subsidiaries, provides building materials solutions in Ireland and internationally. It operates through four segments: Americas Materials Solutions, Americas Building Solutions, Europe Materials Solutions, and Europe Building Solutions. The company provides solutions for the construction and maintenance of public infrastructure and commercial and residential buildings; and produces and sells aggregates, cement, readymixed concrete, and asphalt, as well as provides paving and construction services. It also manufactures, supplies, and delivers solutions for the built environment in communities across North America; and offers building and infrastructure solutions serving complex critical utility infrastructure, such as water, energy, transportation, and telecommunications projects, and outdoor living solutions for enhancing private and public spaces. In addition, the company combines materials, products, and services to produce a wide range of architectural and infrastructural solutions for use in the building and renovation of critical utility infrastructure, commercial and residential buildings, and outdoor living spaces for the built environment. Further, it produces and supplies precast and pre-stressed concrete products comprising floor and wall elements, beams, vaults, pipes, and manholes; granite, limestone, and sandstone; concrete and polymer-based products, such as underground vaults, drainage systems, utility enclosures, and modular precast structures; engineered steel, polymer-based anchoring, fixing, and connecting solutions; concrete masonry, hardscape and related products, including pavers, blocks and curbs, retaining walls, and slabs; and fencing and railing systems, composite decking, lawn and garden products, and packaged concrete mixes. The company was founded in 1936 and is headquartered in Dublin, Ireland.