Reviewing Frontdoor (NASDAQ:FTDR) and Installed Building Products (NYSE:IBP)

Frontdoor (NASDAQ:FTDR) and Installed Building Products (NYSE:IBP) are both mid-cap construction companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Profitability

This table compares Frontdoor and Installed Building Products’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frontdoor	12.18%	120.79%	14.09%
Installed Building Products	8.93%	43.71%	14.58%

Risk and Volatility

Frontdoor has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500. Comparatively, Installed Building Products has a beta of 1.97, suggesting that its stock price is 97% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Frontdoor and Installed Building Products, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frontdoor	0	4	2	1	2.57
Installed Building Products	2	10	0	0	1.83

Frontdoor currently has a consensus price target of $68.60, suggesting a potential upside of 13.29%. Installed Building Products has a consensus price target of $259.70, suggesting a potential downside of 15.05%. Given Frontdoor’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Frontdoor is more favorable than Installed Building Products.

Institutional and Insider Ownership

99.6% of Installed Building Products shares are held by institutional investors. 1.6% of Frontdoor shares are held by company insiders. Comparatively, 16.2% of Installed Building Products shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Frontdoor and Installed Building Products”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frontdoor	$2.09 billion	2.04	$255.00 million	$3.41	17.76
Installed Building Products	$2.97 billion	2.77	$265.40 million	$9.73	31.42

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

Summary

Installed Building Products beats Frontdoor on 9 of the 15 factors compared between the two stocks.

About Frontdoor

Frontdoor, Inc. provides home warranties in the United States in the United States. Its customizable home warranties help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances. The company’s home warranty customers subscribe to an annual service plan agreement that covers the repair or replacement of principal components of approximately 20 home systems and appliances, including electrical, plumbing, water heaters, refrigerators, dishwashers, and ranges/ovens/cooktops, as well as electronics, pools, and spas and pumps; and heating, ventilation, and air conditioning systems. It also offers on-demand home services and a one-stop app experience for home repair and maintenance; and Streem technology, an app that empowers homeowners by connecting them in real time through video chat with qualified experts to diagnose and solve their problems. The company serves homeowners under the Frontdoor, American Home Shield, HSA, OneGuard, Landmark Home Warranty, Frontdoor logo, and Streem brands. The company was founded in 1971 and is headquartered in Memphis, Tennessee.

About Installed Building Products

Installed Building Products, Inc., together with its subsidiaries, engages in the installation of insulation, waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mirrors, and other products in the United States. It operates through Installation, Distribution, and Manufacturing operation segments. The company offers a range of insulation materials, such as fiberglass and cellulose, and spray foam insulation materials. It is also involved in the installation of insulation and sealant materials in various areas of a structure, which includes basement and crawl space, building envelope, attic, and acoustical applications. In addition, the company installs a range of caulk and sealant products that control air infiltration in residential and commercial buildings; and waterproofing options, including sheet and hot applied waterproofing membranes, as well as deck coating, bentonite, and air and vapor systems. Further, it distributes spray foam insulation, metal building insulation, residential insulation, and mechanical and fabricated Styrofoam insulation, as well as accessories and equipment used in the insulation installation process; and manufactures cellulose insulation and specialty industrial fibers. It serves homebuilders, multi-family and commercial and agricultural construction firms, individual homeowners, and repair and remodeling contractors. The company was formerly known as CCIB Holdco, Inc. Installed Building Products, Inc. was founded in 1977 and is based in Columbus, Ohio.