Head to Head Analysis: Frontdoor (NASDAQ:FTDR) versus Knife River (NYSE:KNF)

Knife River (NYSE:KNF) and Frontdoor (NASDAQ:FTDR) are both mid-cap construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

80.1% of Knife River shares are owned by institutional investors. 0.3% of Knife River shares are owned by company insiders. Comparatively, 1.5% of Frontdoor 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.

Profitability

This table compares Knife River and Frontdoor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Knife River	4.87%	9.97%	4.41%
Frontdoor	12.87%	122.74%	14.33%

Valuation and Earnings

This table compares Knife River and Frontdoor”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Knife River	$3.05 billion	1.33	$201.68 million	$2.61	27.46
Frontdoor	$1.84 billion	2.28	$235.00 million	$3.51	16.62

Frontdoor has lower revenue, but higher earnings than Knife River. Frontdoor is trading at a lower price-to-earnings ratio than Knife River, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Knife River has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, Frontdoor has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Knife River and Frontdoor, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Knife River	0	2	6	0	2.75
Frontdoor	1	3	2	0	2.17

Knife River currently has a consensus target price of $96.33, suggesting a potential upside of 34.39%. Frontdoor has a consensus target price of $59.75, suggesting a potential upside of 2.40%. Given Knife River’s stronger consensus rating and higher possible upside, analysts plainly believe Knife River is more favorable than Frontdoor.

Summary

Frontdoor beats Knife River on 8 of the 14 factors compared between the two stocks.

About Knife River

Knife River Corporation, together with its subsidiaries, provides aggregates- led construction materials and contracting services in the United States. It operates through Pacific, Northwest, Mountain, Central, and Energy Services segments. The company mines, processes, and sells construction aggregates, including crushed stone and sand, and gravel; and produces and sells asphalt and ready-mix concrete. It also provides contracting service, such as heavy-civil construction, asphalt and concrete paving, and site development and grading. In addition, the company sells cement, merchandise, and other building materials and related services. The company sells its construction materials to public and private-sector customers, including federal, state, and municipal governments, as well as industrial, commercial and residential developers, and other private parties; and provides its contracting services to public-sector customers for the development and servicing of highways, local roads, bridges, and other public-infrastructure projects. Knife River Corporation was founded in 1917 and is based in Bismarck, North Dakota.

About Frontdoor

Frontdoor, Inc. provides home warranties in the United States in the United States. Its customizable home warranties help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances. The company’s home warranty customers subscribe to an annual service plan agreement that covers the repair or replacement of principal components of approximately 20 home systems and appliances, including electrical, plumbing, water heaters, refrigerators, dishwashers, and ranges/ovens/cooktops, as well as electronics, pools, and spas and pumps; and heating, ventilation, and air conditioning systems. It also offers on-demand home services and a one-stop app experience for home repair and maintenance; and Streem technology, an app that empowers homeowners by connecting them in real time through video chat with qualified experts to diagnose and solve their problems. The company serves homeowners under the Frontdoor, American Home Shield, HSA, OneGuard, Landmark Home Warranty, Frontdoor logo, and Streem brands. The company was founded in 1971 and is headquartered in Memphis, Tennessee.