Apogee Enterprises (NASDAQ: APOG) and Simpson Manufacturing (NYSE:SSD) are both industrial products companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Apogee Enterprises and Simpson Manufacturing, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Apogee Enterprises 0 0 3 0 3.00
Simpson Manufacturing 0 1 0 0 2.00

Apogee Enterprises presently has a consensus target price of $63.33, indicating a potential upside of 37.44%. Simpson Manufacturing has a consensus target price of $46.00, indicating a potential downside of 7.24%. Given Apogee Enterprises’ stronger consensus rating and higher probable upside, research analysts plainly believe Apogee Enterprises is more favorable than Simpson Manufacturing.

Earnings & Valuation

This table compares Apogee Enterprises and Simpson Manufacturing’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Apogee Enterprises $1.20 billion 1.10 $159.52 million $2.74 16.82
Simpson Manufacturing $914.03 million 2.56 $171.24 million $2.05 24.19

Simpson Manufacturing has higher revenue, but lower earnings than Apogee Enterprises. Apogee Enterprises is trading at a lower price-to-earnings ratio than Simpson Manufacturing, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Apogee Enterprises and Simpson Manufacturing’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Apogee Enterprises 6.57% 17.89% 10.27%
Simpson Manufacturing 10.78% 10.26% 8.96%

Insider & Institutional Ownership

83.6% of Simpson Manufacturing shares are held by institutional investors. 3.7% of Apogee Enterprises shares are held by company insiders. Comparatively, 0.4% of Simpson Manufacturing shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

Apogee Enterprises pays an annual dividend of $0.56 per share and has a dividend yield of 1.2%. Simpson Manufacturing pays an annual dividend of $0.84 per share and has a dividend yield of 1.7%. Apogee Enterprises pays out 20.4% of its earnings in the form of a dividend. Simpson Manufacturing pays out 41.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Simpson Manufacturing has raised its dividend for 3 consecutive years. Simpson Manufacturing is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Apogee Enterprises has a beta of 1.56, indicating that its share price is 56% more volatile than the S&P 500. Comparatively, Simpson Manufacturing has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500.

Summary

Apogee Enterprises beats Simpson Manufacturing on 10 of the 17 factors compared between the two stocks.

About Apogee Enterprises

Apogee Enterprises, Inc. is engaged in the design and development of glass solutions for enclosing commercial buildings and framing art. The Company operates through four segments: Architectural Glass, Architectural Services, Architectural Framing Systems and Large-Scale Optical Technologies (LSO). The Architectural Glass segment fabricates coated glass used in customized window and wall systems. The Architectural Services segment designs, engineers, fabricates and installs the walls of glass, windows and other curtainwall products making up the outside skin of commercial and institutional buildings. The Architectural Framing Systems segment designs, engineers, fabricates and finishes the aluminum frames used in customized aluminum and glass window, curtainwall, storefront and entrance systems. The Large-Scale Optical Technologies segment manufactures glass and acrylic products for the custom picture framing and fine art markets.

About Simpson Manufacturing

Simpson Manufacturing Co., Inc., through its subsidiary, Simpson Strong-Tie Company Inc. (SST), designs, engineers and manufactures wood construction products, including connectors, truss plates, fastening systems, fasteners and pre-fabricated lateral systems used in light-frame construction. The Company’s segments are North America, Europe, Asia/Pacific, and Administrative & All Other. The North America segment includes operations primarily in the United States and Canada. The Europe segment includes operations primarily in France, the United Kingdom, Germany, Denmark, Switzerland, Portugal, Poland, the Netherlands and Belgium. The Asia/Pacific segment includes operations primarily in Australia, New Zealand, South Africa, China, Taiwan and Vietnam. The Company manufactures concrete construction products used for concrete, masonry, steel construction and for concrete repair, protection and strengthening, including adhesives, chemicals and mechanical anchors.

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