Reviewing Advanced Drainage Systems (NYSE:WMS) & MasterBrand (NYSE:MBC)

MasterBrand (NYSE:MBC) and Advanced Drainage Systems (NYSE:WMS) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Valuation and Earnings

This table compares MasterBrand and Advanced Drainage Systems”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MasterBrand	$2.73 billion	0.48	$26.70 million	($0.69)	-9.30
Advanced Drainage Systems	$3.05 billion	3.16	$426.46 million	$5.79	22.07

Advanced Drainage Systems has higher revenue and earnings than MasterBrand. MasterBrand is trading at a lower price-to-earnings ratio than Advanced Drainage Systems, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

87.3% of MasterBrand shares are held by institutional investors. Comparatively, 89.8% of Advanced Drainage Systems shares are held by institutional investors. 2.8% of MasterBrand shares are held by insiders. Comparatively, 1.7% of Advanced Drainage Systems shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for MasterBrand and Advanced Drainage Systems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MasterBrand	1	1	0	0	1.50
Advanced Drainage Systems	0	2	8	0	2.80

MasterBrand currently has a consensus target price of $10.00, indicating a potential upside of 55.79%. Advanced Drainage Systems has a consensus target price of $187.40, indicating a potential upside of 46.68%. Given MasterBrand’s higher possible upside, equities research analysts plainly believe MasterBrand is more favorable than Advanced Drainage Systems.

Volatility and Risk

MasterBrand has a beta of 1.48, indicating that its share price is 48% more volatile than the S&P 500. Comparatively, Advanced Drainage Systems has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500.

Profitability

This table compares MasterBrand and Advanced Drainage Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MasterBrand	-3.49%	3.65%	1.60%
Advanced Drainage Systems	14.00%	28.28%	12.30%

Summary

Advanced Drainage Systems beats MasterBrand on 11 of the 14 factors compared between the two stocks.

About MasterBrand

MasterBrand, Inc. engages in the manufacture and sale of residential cabinets in the United States and Canada. The company offers a range of residential cabinetry products for the kitchen, bathroom, and other parts of the home. It sells its products to remodeling and new construction markets through dealers, retailers, and builders. The company was formerly known as United Cabinet Incorporated. MasterBrand, Inc. was founded in 1954 and is headquartered in Beachwood, Ohio.

About Advanced Drainage Systems

Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products in North America and internationally. The company operates through Pipe, International, Infiltrator, and Allied Products & Other segments. It offers single, double, and triple wall corrugated polypropylene and polyethylene pipes; plastic leachfield chambers and systems; EZflow synthetic aggregate bundles; wastewater purification through mechanical aeration wastewater for residential and commercial systems; septic tanks and accessories; combined treatment and dispersal systems, including advanced enviro-septic and advanced treatment leachfield systems; and allied products, including storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators. The company also purchases and distributes construction fabrics and other geosynthetic products for soil stabilization, reinforcement, filtration, separation, erosion control, and sub-surface drainage, as well as drainage grates and other products. In addition, it provides PVC hubs, rubber sleeves, and stainless-steel bands. The company offers its products for non-residential, residential, agriculture, and infrastructure applications through a network of distribution centers. Advanced Drainage Systems, Inc. incorporated in 1966 and is headquartered in Hilliard, Ohio.