Analyzing Owens Corning (NYSE:OC) and Aspen Aerogels (ASPN)

Aspen Aerogels (NYSE: ASPN) and Owens Corning (NYSE:OC) are both construction companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitabiliy and dividends.

Analyst Recommendations

This is a summary of recent ratings and price targets for Aspen Aerogels and Owens Corning, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aspen Aerogels 0 3 2 0 2.40
Owens Corning 0 6 15 0 2.71

Aspen Aerogels currently has a consensus target price of $6.92, suggesting a potential upside of 45.61%. Owens Corning has a consensus target price of $70.28, suggesting a potential upside of 2.52%. Given Aspen Aerogels’ higher probable upside, equities analysts clearly believe Aspen Aerogels is more favorable than Owens Corning.

Dividends

Owens Corning pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. Aspen Aerogels does not pay a dividend. Owens Corning pays out 23.1% of its earnings in the form of a dividend. Aspen Aerogels has increased its dividend for 2 consecutive years.

Insider & Institutional Ownership

74.3% of Aspen Aerogels shares are held by institutional investors. 14.7% of Aspen Aerogels shares are held by insiders. Comparatively, 1.8% of Owens Corning shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Aspen Aerogels and Owens Corning’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aspen Aerogels -22.22% -20.44% -17.55%
Owens Corning 6.61% 11.12% 5.44%

Earnings and Valuation

This table compares Aspen Aerogels and Owens Corning’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Aspen Aerogels $107.92 million 0.91 -$8.40 million ($1.00) -4.75
Owens Corning $5.98 billion 1.27 $1.08 billion $3.47 19.76

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

Risk and Volatility

Aspen Aerogels has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Owens Corning has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Summary

Owens Corning beats Aspen Aerogels on 11 of the 16 factors compared between the two stocks.

About Aspen Aerogels

Aspen Aerogels, Inc. is an energy technology company that designs, develops and manufactures aerogel insulation used primarily in energy infrastructure facilities. The Company also performs contract research services for various federal and non-federal government agencies, including the Department of Defense, the Department of Energy and other institutions. Its product lines include Pyrogel and Cryogel. The Company provides Pyrogel XT/XT-E that reduces the risk of corrosion under insulation in high temperature operating systems; Pyrogel XTF, which provides protection against fire; Cryogel Z, which is designed for sub-ambient and cryogenic applications in the energy infrastructure market, and Spaceloft Subsea, which is used in pipe-in-pipe applications in offshore oil production. It also offers Spaceloft for use in building and construction market, and Cryogel X201, which is used in cold system designs consisting of refrigerated appliances, cold storage equipment and aerospace systems.

About Owens Corning

Owens Corning is engaged in the business of composite and building materials systems, delivering a range of products and services. The Company’s products range from glass fiber used to reinforce composite materials for transportation, electronics, marine, infrastructure, wind-energy and other markets to insulation and roofing for residential, commercial and industrial applications. The Company’s segments include Composites, Insulation and Roofing. The Composites segment sells glass fiber and/or glass mat directly to a small number of shingle manufacturers. Its insulating products include thermal and acoustical batts, loosefill insulation, foam sheathing and accessories, and these are sold under brand names, such as Owens Corning PINK FIBERGLAS Insulation. The primary products in the Roofing segment are laminate and strip asphalt roofing shingles. Its other products include oxidized asphalt, roofing components and synthetic packaging materials.

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