Resideo Technologies (NYSE:REZI) versus Quanex Building Products (NYSE:NX) Critical Review

Quanex Building Products (NYSE:NX) and Resideo Technologies (NYSE:REZI) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Risk & Volatility

Quanex Building Products has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, Resideo Technologies has a beta of 1.6, indicating that its stock price is 60% more volatile than the S&P 500.

Valuation and Earnings

This table compares Quanex Building Products and Resideo Technologies”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Quanex Building Products	$1.84 billion	0.49	-$250.81 million	$0.99	19.67
Resideo Technologies	$7.47 billion	0.37	-$527.00 million	$2.26	8.05

Quanex Building Products has higher earnings, but lower revenue than Resideo Technologies. Resideo Technologies is trading at a lower price-to-earnings ratio than Quanex Building Products, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

97.5% of Quanex Building Products shares are held by institutional investors. Comparatively, 91.7% of Resideo Technologies shares are held by institutional investors. 1.9% of Quanex Building Products shares are held by insiders. Comparatively, 1.6% of Resideo Technologies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Quanex Building Products and Resideo Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Quanex Building Products	2.43%	11.61%	4.30%
Resideo Technologies	5.37%	17.79%	5.13%

Analyst Ratings

This is a summary of recent recommendations and price targets for Quanex Building Products and Resideo Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quanex Building Products	0	2	1	0	2.33
Resideo Technologies	1	2	3	0	2.33

Quanex Building Products currently has a consensus price target of $28.00, suggesting a potential upside of 43.77%. Resideo Technologies has a consensus price target of $35.00, suggesting a potential upside of 92.27%. Given Resideo Technologies’ higher possible upside, analysts plainly believe Resideo Technologies is more favorable than Quanex Building Products.

Summary

Resideo Technologies beats Quanex Building Products on 8 of the 13 factors compared between the two stocks.

About Quanex Building Products

Quanex Building Products Corporation, together with its subsidiaries, provides components for the fenestration industry in the United States, rest of Europe, Canada, Asia, the United Kingdom, and internationally. The company operates through three segments: North American Fenestration, European Fenestration, and North American Cabinet Components. It offers flexible insulating glass spacers, extruded vinyl profiles, window and door screens, and precision-formed metal and wood products, as well as cabinet doors and other components for original equipment manufacturers (OEMs) in the kitchen and bathroom cabinet industry. In addition, the company provides various non-fenestration components and products, including solar panel sealants, trim moldings, vinyl decking, fencing, water retention barriers, and conservatory roof components. It sells its products to OEMs in the building products industry through sales representatives, direct sales force, distributors, and independent sales agents. Quanex Building Products Corporation was founded in 1927 and is based in Houston, Texas.

About Resideo Technologies

Resideo Technologies, Inc. develops, manufactures, and sells comfort, energy management, and safety and security solutions to the commercial and residential end markets in the United States, Europe, and internationally. The company operates in two segments, Products and Solutions, and ADI Global Distribution. The Products and Solutions segment provides temperature and humidity control, thermal and combustion solutions, water and indoor air quality solutions, energy products and solutions, water and air solutions, smoke and carbon monoxide detection home safety and fire suppression, security panels, sensors, peripherals, wire and cable, communications devices, video cameras, other home-related lifestyle convenience solutions, cloud infrastructure, installation and maintenance tools, and related software products under the Honeywell Home brand as well as Resideo, Braukmann, First Alert, and BRK brands. The ADI Global Distribution segment engages in the distribution of security, fire, access control, and video products; and participates in the broader related markets of smart home, power, audio, ProAV, networking, communications, data communications, wire and cable, enterprise connectivity, and structured wiring products. The company sells its products and services through a network of professional contractors, distributors, and original equipment manufacturers, as well as retail and online merchants. Resideo Technologies, Inc. was incorporated in 2018 and is headquartered in Scottsdale, Arizona.