Analyzing Acuity Brands (AYI) and LSI Industries (NASDAQ:LYTS)

Acuity Brands (NYSE: AYI) and LSI Industries (NASDAQ:LYTS) are both construction companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitabiliy.

Insider and Institutional Ownership

77.5% of LSI Industries shares are owned by institutional investors. 1.4% of Acuity Brands shares are owned by insiders. Comparatively, 5.4% of LSI Industries shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings for Acuity Brands and LSI Industries, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acuity Brands 2 3 10 0 2.53
LSI Industries 0 0 2 0 3.00

Acuity Brands presently has a consensus price target of $220.64, suggesting a potential upside of 8.08%. LSI Industries has a consensus price target of $12.50, suggesting a potential upside of 37.97%. Given LSI Industries’ stronger consensus rating and higher probable upside, analysts plainly believe LSI Industries is more favorable than Acuity Brands.

Volatility & Risk

Acuity Brands has a beta of 1.42, suggesting that its share price is 42% more volatile than the S&P 500. Comparatively, LSI Industries has a beta of 1.57, suggesting that its share price is 57% more volatile than the S&P 500.

Dividends

Acuity Brands pays an annual dividend of $0.52 per share and has a dividend yield of 0.3%. LSI Industries pays an annual dividend of $0.20 per share and has a dividend yield of 2.2%. Acuity Brands pays out 7.2% of its earnings in the form of a dividend. LSI Industries pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Valuation and Earnings

This table compares Acuity Brands and LSI Industries’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Acuity Brands $3.47 billion 2.54 $584.60 million $7.18 28.43
LSI Industries $328.82 million 0.70 $15.88 million $0.15 60.40

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

Profitability

This table compares Acuity Brands and LSI Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acuity Brands 9.04% 19.89% 11.50%
LSI Industries 1.13% 3.77% 2.83%

Summary

Acuity Brands beats LSI Industries on 9 of the 16 factors compared between the two stocks.

Acuity Brands Company Profile

Acuity Brands, Inc. is a provider of lighting solutions for commercial, institutional, industrial, infrastructure and residential applications throughout North America and other international markets. The Company operates through North American segment. The Company offers a portfolio of indoor and outdoor lighting and building management solutions for commercial, institutional, industrial, infrastructure and residential applications. The portfolio of lighting solutions include lighting products utilizing fluorescent, light emitting diode (LED), organic LED (OLED), high intensity discharge, metal halide, and incandescent light sources to illuminate a number of applications. The solutions portfolio of the Company also includes modular wiring, LED drivers, sensors, glass and inverters sold primarily to original equipment manufacturers (OEMs). Its lighting and building management solutions are marketed under various brand names, including Lithonia Lighting and Holophane.

LSI Industries Company Profile

LSI Industries Inc. is a provider of corporate visual image solutions to the petroleum/convenience store industry. The Company designs and develops aspects of the solid-state light emitting diode (LED) lighting, from the electronic circuit board, to the software to drive and control the LEDs, to the structure of the LED product. It operates through three segments: Lighting, Graphics and Technology. The Lighting Segment manufactures and markets outdoor and indoor lighting and lighting controls for the commercial, industrial and multi-site retail markets, including the quick-service and automotive markets. The Graphics Segment manufactures and sells exterior and interior visual image elements related to signage and graphics, including integrated digital solutions. The Technology Segment designs, engineers, and manufactures electronic circuit boards, assemblies, lighting controls and large format solid state LED video displays. The Company provides a range of lighting control solutions.

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