Forterra (NASDAQ: FRTA) and Smart Sand (NASDAQ:SND) are both small-cap construction companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, dividends, institutional ownership, profitability and analyst recommendations.

Earnings & Valuation

This table compares Forterra and Smart Sand’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Forterra $1.36 billion 0.47 -$7.60 million N/A N/A
Smart Sand $59.23 million 5.75 $10.37 million $0.65 12.97

Smart Sand has lower revenue, but higher earnings than Forterra.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Forterra and Smart Sand, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Forterra 0 4 2 0 2.33
Smart Sand 0 4 6 0 2.60

Forterra currently has a consensus target price of $11.83, suggesting a potential upside of 18.93%. Smart Sand has a consensus target price of $13.45, suggesting a potential upside of 59.55%. Given Smart Sand’s stronger consensus rating and higher probable upside, analysts clearly believe Smart Sand is more favorable than Forterra.

Profitability

This table compares Forterra and Smart Sand’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Forterra -5.97% -69.57% -4.00%
Smart Sand 18.67% 14.41% 11.85%

Institutional and Insider Ownership

99.9% of Forterra shares are held by institutional investors. Comparatively, 49.5% of Smart Sand shares are held by institutional investors. 0.3% of Forterra shares are held by insiders. Comparatively, 46.4% of Smart Sand shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Smart Sand beats Forterra on 9 of the 11 factors compared between the two stocks.

About Forterra

Forterra, Inc. is a manufacturer of pipe and precast products. The Company offers products for a range of water-related infrastructure applications, including water transmission, distribution and drainage. The Company operates approximately 95 facilities. Its products are available in the United States and Eastern Canada.

About Smart Sand

Smart Sand, Inc. is a producer of Northern White raw frac sand, which is a proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells. The Company sells its products primarily to oil and natural gas exploration and production companies and oilfield service companies under a combination of long-term take-or-pay contracts and spot sales in the open market. It owns and operates a raw frac sand mine and related processing facility near Oakdale, Wisconsin. In addition to the Oakdale facility, it owns a second property in Jackson County, Wisconsin, known as Hixton site. Its sand reserves include a balanced concentration of coarse (20/40, 30/50 and 40/70 gradation) sands and fine (60/140 gradation) sand. Its reserves contain deposits of approximately 20% of 20/40 and coarser substrate, over 40% of 40/70 mesh substrate and approximately 40% of 100-mesh substrate. Its 30/50 gradation is a derivative of the 20/40 and 40/70 blends.

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