Critical Analysis: TopBuild (NYSE:BLD) versus Hillman Solutions (NASDAQ:HLMN)

Hillman Solutions (NASDAQ:HLMN) and TopBuild (NYSE:BLD) are both construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, valuation, risk, earnings, analyst recommendations, dividends and institutional ownership.

Risk & Volatility

Hillman Solutions has a beta of 1.65, suggesting that its share price is 65% more volatile than the S&P 500. Comparatively, TopBuild has a beta of 1.67, suggesting that its share price is 67% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Hillman Solutions and TopBuild, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hillman Solutions	0	5	4	0	2.44
TopBuild	0	6	9	2	2.76

Hillman Solutions currently has a consensus target price of $11.83, indicating a potential upside of 30.18%. TopBuild has a consensus target price of $437.06, indicating a potential upside of 1.08%. Given Hillman Solutions’ higher possible upside, research analysts clearly believe Hillman Solutions is more favorable than TopBuild.

Profitability

This table compares Hillman Solutions and TopBuild’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hillman Solutions	2.44%	9.71%	4.95%
TopBuild	10.84%	27.10%	11.29%

Valuation & Earnings

This table compares Hillman Solutions and TopBuild”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hillman Solutions	$1.47 billion	1.22	$17.25 million	$0.19	47.84
TopBuild	$5.33 billion	2.28	$622.60 million	$19.70	21.95

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

Insider & Institutional Ownership

98.1% of Hillman Solutions shares are held by institutional investors. Comparatively, 95.7% of TopBuild shares are held by institutional investors. 4.9% of Hillman Solutions shares are held by insiders. Comparatively, 0.4% of TopBuild shares are held by 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.

Summary

TopBuild beats Hillman Solutions on 11 of the 15 factors compared between the two stocks.

About Hillman Solutions

Founded in 1964 and headquartered in Cincinnati, Ohio, Hillman is a leading North American provider of complete hardware solutions, delivered with industry best customer service to over 40,000 locations. Hillman designs innovative product and merchandising solutions for complex categories that deliver an outstanding customer experience to home improvement centers, mass merchants, national and regional hardware stores, pet supply stores, and OEM & Industrial customers. Leveraging a world-class distribution and sales network, Hillman delivers a “small business” experience with “big business” efficiency.

About TopBuild

TopBuild Corp., together with its subsidiaries, engages in the installation and distribution of insulation and other building material products to the construction industry. The company operates in two segments, Installation and Specialty Distribution. It provides insulation products and accessories, glass and windows, rain gutters, garage doors, fireplaces, roofing materials, closet shelving, and other products. The company also offers insulation installation services for fiberglass batts and rolls, blown-in loose fill fiberglass, polyurethane spray foam, and blown-in loose fill cellulose applications. In addition, it distributes building and mechanical insulation, insulation accessories, and other building product materials for the residential, commercial, and industrial end markets. The company serves single-family homebuilders, single-family custom builders, multi-family builders, commercial general contractors, remodelers, and individual homeowners, as well as insulation contractors, gutter contractors, weatherization contractors, other contractors, dealers, metal building erectors, and modular home builders. It operates installation branches and distribution centers in the United States and Canada. The company was formerly known as Masco SpinCo Corp. and changed its name to TopBuild Corp. in March 2015. TopBuild Corp. was incorporated in 2015 and is headquartered in Daytona Beach, Florida.