Caesarstone (NASDAQ:CSTE – Get Free Report) and Construction Partners (NASDAQ:ROAD – Get Free Report) are both construction companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, profitability, risk, institutional ownership, dividends, valuation and earnings.
Profitability
This table compares Caesarstone and Construction Partners’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Caesarstone | -18.44% | -19.35% | -9.18% |
| Construction Partners | 3.99% | 15.26% | 4.40% |
Earnings and Valuation
This table compares Caesarstone and Construction Partners”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Caesarstone | $443.22 million | 0.16 | -$42.83 million | ($2.03) | -1.04 |
| Construction Partners | $2.81 billion | 2.69 | $101.78 million | $2.20 | 60.88 |
Construction Partners has higher revenue and earnings than Caesarstone. Caesarstone is trading at a lower price-to-earnings ratio than Construction Partners, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Caesarstone has a beta of -0.09, indicating that its share price is 109% less volatile than the S&P 500. Comparatively, Construction Partners has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.
Insider & Institutional Ownership
33.7% of Caesarstone shares are owned by institutional investors. Comparatively, 94.8% of Construction Partners shares are owned by institutional investors. 15.7% of Construction Partners shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Caesarstone and Construction Partners, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Caesarstone | 1 | 0 | 0 | 0 | 1.00 |
| Construction Partners | 0 | 3 | 2 | 2 | 2.86 |
Construction Partners has a consensus target price of $127.80, suggesting a potential downside of 4.58%. Given Construction Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Construction Partners is more favorable than Caesarstone.
Summary
Construction Partners beats Caesarstone on 15 of the 15 factors compared between the two stocks.
About Caesarstone
Caesarstone Ltd., together with its subsidiaries, designs, develops, manufactures, and markets engineered stone and other materials under the Caesarstone brand in the United States, Canada, Latin America, Australia, Asia, Europe, the Middle East and Africa, and Israel. The company’s engineered stone slabs are primarily used as indoor and outdoor kitchen countertops in the renovation and remodeling, and residential construction sectors. Its products are also used in other applications, such as vanity tops, wall panels, back splashes, floor tiles, stairs, furniture, and other interior and exterior surfaces that are used in various residential and non-residential applications. The company also offers porcelain products under the Lioli brand for countertops, flooring, and cladding applications; sells natural stone, sinks, and various ancillary fabrication tools and materials; and resells natural stones, as well as various ancillaries, and fabrication and installation accessories, as well as provides fabrication and installation services. It sells its products directly to wholesalers, resellers, and fabricators; and through direct sales force and indirect network of independent distributors. The company was formerly known as Caesarstone Sdot Yam Ltd. and changed its name to Caesarstone Ltd. in June 2016. Caesarstone Ltd. was founded in 1987 and is headquartered in Menashe, Israel.
About Construction Partners
Construction Partners, Inc., a civil infrastructure company, constructs and maintains roadways in Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee. The company provides various products and services to public and private infrastructure projects, such as highways, roads, bridges, airports, and commercial and residential developments. It also engages in manufacturing and distributing hot mix asphalt (HMA) for internal use and sales to third parties in connection with construction projects; and paving activities, including the construction of roadway base layers and application of asphalt pavement. In addition, the company is involved in site development, including the installation of utility and drainage systems; mining aggregates, such as sand, gravel, and construction stones that are used as raw materials in the production of HMA; and distributing liquid asphalt cement for internal use and sales to third parties in connection with HMA production. The company was formerly known as SunTx CPI Growth Company, Inc. and changed its name to Construction Partners, Inc. in September 2017. Construction Partners, Inc. was founded in 2007 and is headquartered in Dothan, Alabama.
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