Critical Review: NCI Building Systems (NCS) vs. Primoris Services Corporation (NASDAQ:PRIM)
NCI Building Systems (NYSE: NCS) and Primoris Services Corporation (NASDAQ:PRIM) are both small-cap construction companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitabiliy and analyst recommendations.
Insider & Institutional Ownership
92.3% of NCI Building Systems shares are held by institutional investors. Comparatively, 70.4% of Primoris Services Corporation shares are held by institutional investors. 1.8% of NCI Building Systems shares are held by insiders. Comparatively, 23.1% of Primoris Services Corporation shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares NCI Building Systems and Primoris Services Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|NCI Building Systems||$1.75 billion||0.71||$156.28 million||$0.86||20.35|
|Primoris Services Corporation||$2.13 billion||0.60||$136.03 million||$0.62||40.15|
NCI Building Systems has higher revenue, but lower earnings than Primoris Services Corporation. NCI Building Systems is trading at a lower price-to-earnings ratio than Primoris Services Corporation, indicating that it is currently the more affordable of the two stocks.
Primoris Services Corporation pays an annual dividend of $0.22 per share and has a dividend yield of 0.9%. NCI Building Systems does not pay a dividend. Primoris Services Corporation pays out 35.5% of its earnings in the form of a dividend.
This table compares NCI Building Systems and Primoris Services Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|NCI Building Systems||3.50%||20.84%||5.75%|
|Primoris Services Corporation||1.49%||8.15%||3.56%|
This is a summary of current ratings and recommmendations for NCI Building Systems and Primoris Services Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|NCI Building Systems||0||2||3||0||2.60|
|Primoris Services Corporation||0||5||3||0||2.38|
NCI Building Systems presently has a consensus target price of $18.50, suggesting a potential upside of 5.71%. Primoris Services Corporation has a consensus target price of $25.50, suggesting a potential upside of 2.45%. Given NCI Building Systems’ stronger consensus rating and higher possible upside, equities analysts clearly believe NCI Building Systems is more favorable than Primoris Services Corporation.
Volatility and Risk
NCI Building Systems has a beta of 1.5, meaning that its share price is 50% more volatile than the S&P 500. Comparatively, Primoris Services Corporation has a beta of 1.58, meaning that its share price is 58% more volatile than the S&P 500.
NCI Building Systems beats Primoris Services Corporation on 10 of the 15 factors compared between the two stocks.
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.
About Primoris Services Corporation
Primoris Services Corporation is a holding company. The Company holds various subsidiaries, through which it operates as a specialty contractor and infrastructure company. The Company provides a range of construction, fabrication, maintenance, replacement, water and wastewater, and engineering services to public utilities, petrochemical companies, energy companies, municipalities, state departments of transportation and other customers. It operates in three segments: the West Construction Services segment (West segment), the East Construction Services segment (East segment) and the Energy segment. The Company installs, replaces, repairs and rehabilitates natural gas, refined product, water and wastewater pipeline systems; large diameter gas and liquid pipeline facilities, and heavy civil projects, earthwork and site development.
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