Analyzing Quanex Building Products (NYSE:NX) & Obayashi (OTCMKTS:OBYCF)

Quanex Building Products (NYSE:NX) and Obayashi (OTCMKTS:OBYCF) are both construction companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Quanex Building Products	-15.45%	10.48%	4.40%
Obayashi	6.64%	9.41%	3.73%

Volatility and Risk

Quanex Building Products has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, Obayashi has a beta of 0.34, indicating that its share price is 66% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Quanex Building Products and Obayashi, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quanex Building Products	1	1	0	0	1.50
Obayashi	0	0	0	0	0.00

Insider and Institutional Ownership

97.5% of Quanex Building Products shares are owned by institutional investors. 2.2% of Quanex Building Products shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Quanex Building Products and Obayashi”s 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	0.32	$33.06 million	($6.22)	-2.06
Obayashi	$17.21 billion	0.73	$976.81 million	$1.59	10.98

Obayashi has higher revenue and earnings than Quanex Building Products. Quanex Building Products is trading at a lower price-to-earnings ratio than Obayashi, indicating that it is currently the more affordable of 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 Obayashi

Obayashi Corporation engages in the construction business in Japan, North America, Asia, the Middle East, Europe, and Oceania. The company constructs buildings, including offices, condominiums, commercial facilities, factories, hospitals, and schools; and civil engineering projects, such as tunnels, bridges, dams, river works, urban civil engineering structures, railroads, and expressways. It is also involved in the development and leasing of real estate properties in various locations, primarily in urban areas, as well as property management activities; solar, biomass, geothermal, and wind power generation business; and PPP and agriculture business. In addition, the company provides non-life insurance agency business. Further, it engages in the provision of urban redevelopment, contracted operations, and facility management services, as well as M&E design and construction activities. The company was founded in 1892 and is headquartered in Tokyo, Japan.