USG Corporation (NYSE: USG) and Vulcan Materials (NYSE:VMC) are both mid-cap construction companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, earnings, risk, profitability, institutional ownership, dividends and valuation.

Analyst Ratings

This is a summary of current recommendations and price targets for USG Corporation and Vulcan Materials, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
USG Corporation 2 11 5 0 2.17
Vulcan Materials 0 3 5 0 2.63

USG Corporation currently has a consensus target price of $31.00, indicating a potential upside of 17.29%. Vulcan Materials has a consensus target price of $138.60, indicating a potential upside of 18.86%. Given Vulcan Materials’ stronger consensus rating and higher possible upside, analysts plainly believe Vulcan Materials is more favorable than USG Corporation.

Volatility and Risk

USG Corporation has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500. Comparatively, Vulcan Materials has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Insider and Institutional Ownership

89.3% of USG Corporation shares are held by institutional investors. Comparatively, 84.9% of Vulcan Materials shares are held by institutional investors. 0.7% of USG Corporation shares are held by insiders. Comparatively, 0.9% of Vulcan Materials shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Vulcan Materials pays an annual dividend of $1.00 per share and has a dividend yield of 0.9%. USG Corporation does not pay a dividend. Vulcan Materials pays out 32.4% of its earnings in the form of a dividend. USG Corporation has raised its dividend for 3 consecutive years.

Valuation and Earnings

This table compares USG Corporation and Vulcan Materials’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
USG Corporation $3.08 billion 1.23 $487.00 million $3.10 8.53
Vulcan Materials $3.70 billion 4.17 $940.88 million $3.09 37.74

Vulcan Materials has higher revenue and earnings than USG Corporation. USG Corporation is trading at a lower price-to-earnings ratio than Vulcan Materials, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares USG Corporation and Vulcan Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
USG Corporation 14.94% 13.57% 6.20%
Vulcan Materials 11.28% 8.72% 4.48%

USG Corporation Company Profile

USG Corporation, through its subsidiaries, is a manufacturer and distributor of building materials. The Company’s segments include Gypsum, Ceilings and USG Boral Building Products (UBBP). It produces a range of products for use in new residential, new nonresidential, and residential and nonresidential repair and remodel construction, as well as products used in certain industrial processes. Its products are distributed through building materials dealers, home improvement centers and other retailers, specialty wallboard distributors, and contractors. Gypsum segment manufactures and markets gypsum and related products in the United States, Canada, Mexico and Latin America. Ceilings segment manufactures and markets interior systems products in the United States, Canada, Mexico and Latin America. The UBBP segment manufactures, distributes and sells certain building products, mines raw gypsum and sells natural and synthetic gypsum throughout Asia, Australasia and the Middle East.

Vulcan Materials Company Profile

Vulcan Materials Company is a supplier of construction aggregates (primarily crushed stone, sand and gravel) and a producer of asphalt mix and ready-mixed concrete. The Company operates through four segments: Aggregates, Asphalt Mix, Concrete and Calcium. The Aggregates segment produces and sells aggregates (crushed stone, sand and gravel, sand, and other aggregates) and related products and services (transportation and other). The Company produces and sells asphalt mix in Arizona, California, New Mexico and Texas. The Company produces and sells ready-mixed concrete in Georgia, Maryland, New Mexico, Texas, Virginia, Washington District of Columbia and the Bahamas. The Calcium segment consists of a Florida facility that mines, produces and sells calcium products. As of December 31, 2016, it had 337 active aggregates facilities. The Company sells aggregates that are used as ballast for construction and maintenance of railroad tracks.

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