USD Partners (NYSE: USDP) and NCI Building Systems (NYSE:NCS) are both small-cap transportation companies, but which is the better business? We will compare the two companies based on the strength of their earnings, analyst recommendations, profitabiliy, risk, valuation, institutional ownership and dividends.

Insider and Institutional Ownership

28.1% of USD Partners shares are held by institutional investors. Comparatively, 93.2% of NCI Building Systems shares are held by institutional investors. 1.8% of NCI Building Systems shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

USD Partners has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, NCI Building Systems has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500.

Profitability

This table compares USD Partners and NCI Building Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
USD Partners 18.41% 44.28% 6.71%
NCI Building Systems 3.50% 20.84% 5.75%

Earnings and Valuation

This table compares USD Partners and NCI Building Systems’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
USD Partners $110.79 million 2.27 $56.48 million $1.11 9.68
NCI Building Systems $1.75 billion 0.72 $156.28 million $0.86 20.52

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

Analyst Recommendations

This is a summary of current recommendations and price targets for USD Partners and NCI Building Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
USD Partners 1 1 2 0 2.25
NCI Building Systems 0 2 3 0 2.60

USD Partners currently has a consensus price target of $16.00, indicating a potential upside of 48.84%. NCI Building Systems has a consensus price target of $18.50, indicating a potential upside of 4.82%. Given USD Partners’ higher probable upside, research analysts clearly believe USD Partners is more favorable than NCI Building Systems.

Dividends

USD Partners pays an annual dividend of $1.36 per share and has a dividend yield of 12.7%. NCI Building Systems does not pay a dividend. USD Partners pays out 122.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

NCI Building Systems beats USD Partners on 9 of the 16 factors compared between the two stocks.

About USD Partners

USD Partners LP acquires, develops and operates energy-related logistics assets, including rail terminals and other midstream infrastructure. The Company’s segments include Terminalling services and Fleet services. The Terminalling services segment consists of various operations, including Hardisty terminal, Casper terminal and Ethanol terminals. Its Hardisty terminal is an origination terminal where it loads various grades of Canadian crude oil onto railcars for transportation to end markets. The Casper terminal is a crude oil storage, blending and railcar loading terminal located in Casper, Wyoming. Its San Antonio and West Colton terminals are unit train-capable destination terminals that transload ethanol received by rail from producers onto trucks to meet local ethanol demand. The Company provides its customers with railcars and fleet services related to the transportation of liquid hydrocarbons and biofuels by rail under master fleet services agreements.

About NCI Building Systems

NCI Building Systems, Inc. is a manufacturer and marketer of metal products in North America. The Company’s operating segments include Engineered building systems, Metal components and Metal coil coating. The Engineered building systems segment is engaged in the manufacturing of main frames and long bay systems, and engineering and drafting. The Metal components segment’s products include metal roof and wall panels, doors, metal partitions, metal trim, insulated metal panel (IMP) products and other related accessories. The Company manufactures and distributes a range of metal products for the non-residential construction market. It operates in the United States, Mexico, Canada and China. The Company provides metal coil coating services, and designs, engineers, manufactures and markets metal components and engineered building systems. It also provides metal coil coating services for commercial and construction applications, servicing both internal and external customers.

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