Patrick Industries (PATK) & Ply Gem (PGEM) Critical Comparison

Patrick Industries (NASDAQ: PATK) and Ply Gem (NYSE:PGEM) are both small-cap construction companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, dividends and valuation.

Insider and Institutional Ownership

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89.4% of Patrick Industries shares are held by institutional investors. Comparatively, 29.3% of Ply Gem shares are held by institutional investors. 5.2% of Patrick Industries shares are held by insiders. Comparatively, 68.9% of Ply Gem shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Patrick Industries and Ply Gem, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Patrick Industries 0 1 3 0 2.75
Ply Gem 0 3 0 0 2.00

Patrick Industries presently has a consensus target price of $75.75, suggesting a potential upside of 32.89%. Ply Gem has a consensus target price of $21.00, suggesting a potential downside of 3.00%. Given Patrick Industries’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Patrick Industries is more favorable than Ply Gem.

Profitability

This table compares Patrick Industries and Ply Gem’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Patrick Industries 5.24% 23.60% 10.86%
Ply Gem 3.32% 144.46% 5.17%

Valuation & Earnings

This table compares Patrick Industries and Ply Gem’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Patrick Industries $1.64 billion 0.89 $85.71 million $3.18 17.92
Ply Gem $2.06 billion 0.72 $68.32 million $0.98 22.09

Patrick Industries has higher earnings, but lower revenue than Ply Gem. Patrick Industries is trading at a lower price-to-earnings ratio than Ply Gem, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Patrick Industries has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, Ply Gem has a beta of 2.36, indicating that its stock price is 136% more volatile than the S&P 500.

Summary

Patrick Industries beats Ply Gem on 9 of the 14 factors compared between the two stocks.

Patrick Industries Company Profile

Patrick Industries, Inc. manufactures and distributes building products and materials for the recreational vehicle, marine, manufactured housing, and industrial markets in the United States and Canada. Its Manufacturing segment manufactures and sells furniture, shelving, walls, countertops, and cabinet products; cabinet doors, fiberglass bath fixtures, and tile systems; hardwood furniture, vinyl printing, solid surface, granite, and quartz countertop fabrication products; RV paintings; fabricated aluminum products; fiberglass and plastic components; softwoods lumber; custom cabinets; polymer-based flooring products; and electrical systems and components, including instrument and dash panels, and other products. This segment also provides wrapped vinyl, paper, and hardwood profile moldings; interior passage doors; slide-out trim and fascia products; thermoformed shower surrounds; specialty bath and closet building products; fiberglass and plastic helm systems and components; wiring and wire harnesses; aluminum fuel tanks; CNC molds and composite parts; and slotwall panels and components. The company's Distribution segment distributes pre-finished wall and ceiling panels, drywall and drywall finishing products, electronics, wiring products, electrical and plumbing products, cement siding products, raw and processed lumber, fiber reinforced polyester products, interior passage doors, roofing products, laminate and ceramic flooring products, shower doors, furniture, fireplaces and surrounds, interior and exterior lighting products, and other products. It also offers transportation and logistics services. Patrick Industries, Inc. offers its products through a network of manufacturing and distribution centers. The company was founded in 1959 and is based in Elkhart, Indiana.

Ply Gem Company Profile

Ply Gem Holdings, Inc. manufactures and sells residential and commercial building products in the United States and Canada. It operates in two segments: Siding, Fencing, and Stone; and Windows and Doors. The Siding, Fencing, and Stone segment offers vinyl siding and skirting, steel siding, vinyl and aluminum soffit, aluminum trim and gutter coil, fabricated aluminum gutter, aluminum and steel roofing accessory, cellular polyvinyl chloride trim and moulding, J-channel, wide crown molding, window and door trim, F-channel, H-mold, fascia, undersill trim, outside/inside corner post, rain removal system, vinyl fence and railing, engineered slate and cedar shake roofing, and stone veneer products. It also provides injection molded designer accents, such as shakes, shingles, scallops, shutters, vents, and mounts. This segment sells its products to the new construction, and home repair and remodeling sectors primarily under the Variform, Napco, Mastic Home Exteriors, Mitten, Ply Gem/Cellwood, Durabuilt, Ply Gem Trim and Mouldings, Ply Gem, Canyon Stone and Ply Gem Stone, Ply Gem Roofing, Leaf Relief, Leaf Relief Snap Tight, Leaf Smart, and Leaf Logic brands; and the Georgia-Pacific brand through a private label program. The Windows and Doors segment offers vinyl, aluminum-clad vinyl, aluminum, wood, and clad-wood windows and patio doors; and steel, wood, and fiberglass entry doors for the new construction, and home repair and remodeling sectors under the Ply Gem Windows, Simonton Windows, Great Lakes Window, and Ply Gem Canada brands. It sells its products to the new residential and light commercial construction through independent building material dealers, regional/national lumberyard chains, builder direct/OEMs, and retail home centers; and independent home improvement dealers, one-step distributors, and big box retail outlets. The company was incorporated in 2004 and is headquartered in Cary, North Carolina. Ply Gem Holdings, Inc. is a subsidiary of CI Partnerships.

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