Installed Building Products (NYSE:IBP) and Arcosa (NYSE:ACA) Head-To-Head Review

Arcosa (NYSE:ACA) and Installed Building Products (NYSE:IBP) are both mid-cap construction companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.

Earnings & Valuation

This table compares Arcosa and Installed Building Products”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arcosa	$2.57 billion	2.19	$93.70 million	$3.02	37.94
Installed Building Products	$2.94 billion	2.66	$256.60 million	$9.29	31.08

Installed Building Products has higher revenue and earnings than Arcosa. Installed Building Products is trading at a lower price-to-earnings ratio than Arcosa, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

90.7% of Arcosa shares are held by institutional investors. Comparatively, 99.6% of Installed Building Products shares are held by institutional investors. 2.0% of Arcosa shares are held by insiders. Comparatively, 16.2% of Installed Building Products shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Arcosa pays an annual dividend of $0.20 per share and has a dividend yield of 0.2%. Installed Building Products pays an annual dividend of $1.48 per share and has a dividend yield of 0.5%. Arcosa pays out 6.6% of its earnings in the form of a dividend. Installed Building Products pays out 15.9% 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.

Risk and Volatility

Arcosa has a beta of 0.99, suggesting that its share price is 1% less volatile than the S&P 500. Comparatively, Installed Building Products has a beta of 1.91, suggesting that its share price is 91% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Arcosa and Installed Building Products, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arcosa	0	1	3	0	2.75
Installed Building Products	3	10	1	0	1.86

Arcosa currently has a consensus target price of $117.50, indicating a potential upside of 2.54%. Installed Building Products has a consensus target price of $235.36, indicating a potential downside of 18.50%. Given Arcosa’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Arcosa is more favorable than Installed Building Products.

Profitability

This table compares Arcosa and Installed Building Products’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arcosa	5.25%	7.46%	3.74%
Installed Building Products	8.60%	62.74%	14.23%

Summary

Installed Building Products beats Arcosa on 11 of the 16 factors compared between the two stocks.

About Arcosa

Arcosa, Inc., together with its subsidiaries, provides infrastructure-related products and solutions for the construction, engineered structures, and transportation markets in the United States. It operates through three segments: Construction Products, Engineered Structures, and Transportation Products. The Construction Products segment offers natural and recycled aggregates; specialty materials; and construction site support equipment, including trench shields and shoring products for residential and non-residential construction, and specialty/other products, as well as for infrastructure construction. The Engineered Structures segment offers utility structures, wind towers, traffic structures, and telecommunication structures for electricity transmission and distribution, wind power generation, highway road construction, and wireless communication markets. The Transportation Products segment offers inland barges, fiberglass barge covers, winches, marine hardware, and steel components for railcars and transportation equipment; cast components for industrial and mining sectors; and axles, circular forgings, and coupling devices for freight, tank, locomotive, and passenger rail transportation equipment, as well as other industrial uses. Arcosa, Inc. was incorporated in 2018 and is headquartered in Dallas, Texas.

About Installed Building Products

Installed Building Products, Inc., together with its subsidiaries, engages in the installation of insulation, waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mirrors, and other products in the United States. It operates through Installation, Distribution, and Manufacturing operation segments. The company offers a range of insulation materials, such as fiberglass and cellulose, and spray foam insulation materials. It is also involved in the installation of insulation and sealant materials in various areas of a structure, which includes basement and crawl space, building envelope, attic, and acoustical applications. In addition, the company installs a range of caulk and sealant products that control air infiltration in residential and commercial buildings; and waterproofing options, including sheet and hot applied waterproofing membranes, as well as deck coating, bentonite, and air and vapor systems. Further, it distributes spray foam insulation, metal building insulation, residential insulation, and mechanical and fabricated Styrofoam insulation, as well as accessories and equipment used in the insulation installation process; and manufactures cellulose insulation and specialty industrial fibers. It serves homebuilders, multi-family and commercial and agricultural construction firms, individual homeowners, and repair and remodeling contractors. The company was formerly known as CCIB Holdco, Inc. Installed Building Products, Inc. was founded in 1977 and is based in Columbus, Ohio.