Griffon (NYSE:GFF) and PGT Innovations (NYSE:PGTI) are both small-cap multi-sector conglomerates companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.

Profitability

This table compares Griffon and PGT Innovations’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Griffon 6.18% 7.23% 1.56%
PGT Innovations 9.90% 26.98% 10.30%

Analyst Ratings

This is a summary of current recommendations and price targets for Griffon and PGT Innovations, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Griffon 0 2 1 0 2.33
PGT Innovations 0 2 4 0 2.67

Griffon currently has a consensus target price of $19.00, suggesting a potential upside of 13.43%. PGT Innovations has a consensus target price of $21.00, suggesting a potential downside of 4.11%. Given Griffon’s higher possible upside, research analysts clearly believe Griffon is more favorable than PGT Innovations.

Dividends

Griffon pays an annual dividend of $0.28 per share and has a dividend yield of 1.7%. PGT Innovations does not pay a dividend. Griffon pays out 32.2% of its earnings in the form of a dividend. Griffon has increased its dividend for 7 consecutive years.

Valuation and Earnings

This table compares Griffon and PGT Innovations’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Griffon $1.53 billion 0.50 $14.91 million $0.87 19.20
PGT Innovations $511.08 million 2.49 $39.83 million $0.61 36.07

PGT Innovations has lower revenue, but higher earnings than Griffon. Griffon is trading at a lower price-to-earnings ratio than PGT Innovations, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

64.4% of Griffon shares are held by institutional investors. Comparatively, 89.7% of PGT Innovations shares are held by institutional investors. 24.8% of Griffon shares are held by insiders. Comparatively, 5.8% of PGT Innovations shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Griffon has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500. Comparatively, PGT Innovations has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Summary

PGT Innovations beats Griffon on 10 of the 17 factors compared between the two stocks.

Griffon Company Profile

Griffon Corporation, through its wholly-owned subsidiaries, engages in home and building, telephonics, and plastic products businesses worldwide. Its Home & Building Products segment manufactures and markets long-handled tools and landscaping products for homeowners and professionals; and residential and commercial garage doors to professional dealers and home center retail chains. The company's Telephonics segment designs, develops, manufactures, and provides logistical support and lifecycle sustainment services; and intelligence, surveillance, and communications solutions to defense, aerospace, and commercial customers. The company was founded in 1959 and is headquartered in New York, New York.

PGT Innovations Company Profile

PGT Innovations, Inc. manufactures and supplies residential impact-resistant windows and doors in the Southeastern United States, the Gulf Coast, Coastal mid-Atlantic, the Caribbean, Central America, and Canada. The company offers heavy-duty aluminum or vinyl frames with laminated glass to provide protection from hurricane-force winds and wind-borne debris; and non-impact vinyl windows with insulating glass and multi-chambered frames for various climate zones. It also provides customizable non-impact-resistant aluminum frame windows and doors; and non-glass vertical and horizontal sliding panels for porch enclosures, including vinyl-glazed aluminum-framed products used for enclosing screened-in porches that provide protection from inclement weather, as well as cabana doors. In addition, the company offers premium aluminum impact-resistant products; aluminum impact-resistant windows and doors; vinyl energy-efficient impact-resistant windows; and commercial storefront window system and entry doors. Further, it provides high-end luxury aluminum doors and windows, such as impact and non-impact sliding glass doors and terrace doors, fixed picture windows, single hung windows, and horizontal rolling windows; and various aluminum thermally broken doors and windows. The company offers its products primarily under the PGT, CGI, and WinDoor brands, as well as WinGuard, WinGuard Vinyl, EnergyVue, Eze-Breeze, Estate Collection, Sentinel, Estate Entrances, Commercial Series, and Targa names. It serves residential new construction, and home repair and remodeling end markets through window and building supply distributors, window replacement dealers, and enclosure contractors. The company was formerly known as PGT, Inc. and changed its name to PGT Innovations, Inc. in December 2016. PGT Innovations, Inc. was founded in 1980 and is headquartered in North Venice, Florida.

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