Contrasting Caesarstone (NASDAQ:CSTE) and AZZ (NYSE:AZZ)

Caesarstone (NASDAQ:CSTE) and AZZ (NYSE:AZZ) are both industrials companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, earnings, analyst recommendations, valuation and institutional ownership.

Volatility and Risk

Caesarstone has a beta of 0.42, indicating that its share price is 58% less volatile than the S&P 500. Comparatively, AZZ has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.

Valuation and Earnings

This table compares Caesarstone and AZZ”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Caesarstone	$397.23 million	0.25	-$137.47 million	($4.13)	-0.70
AZZ	$1.68 billion	2.42	$317.26 million	$6.56	20.58

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

Insider & Institutional Ownership

33.7% of Caesarstone shares are owned by institutional investors. Comparatively, 90.9% of AZZ shares are owned by institutional investors. 1.7% of AZZ shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations for Caesarstone and AZZ, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Caesarstone	1	0	0	0	1.00
AZZ	0	2	4	0	2.67

AZZ has a consensus price target of $155.25, suggesting a potential upside of 15.01%. Given AZZ’s stronger consensus rating and higher possible upside, analysts clearly believe AZZ is more favorable than Caesarstone.

Profitability

This table compares Caesarstone and AZZ’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Caesarstone	-37.37%	-32.36%	-11.71%
AZZ	11.83%	14.18%	8.48%

Summary

AZZ beats Caesarstone on 14 of the 14 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 AZZ

AZZ Inc. provides hot-dip galvanizing and coil coating solutions in North America. It offers metal finishing solutions for corrosion protection, including hot-dip galvanizing, spin galvanizing, powder coating, anodizing, and plating to steel fabrication and other industries, as well as to fabricators or manufacturers that provide services to the transmission and distribution, bridge and highway, petrochemical, and general industrial markets; and original equipment manufacturers. It also provides aesthetic and corrosion protective coatings and related value-added services for steel and aluminum coil primarily serving the construction; appliance; heating, ventilation, and air conditioning; container; transportation; and other end markets. The company was incorporated in 1956 and is headquartered in Fort Worth, Texas.