Caesarstone (NASDAQ:CSTE) vs. Arcosa (NYSE:ACA) Critical Survey

Caesarstone (NASDAQ:CSTE) and Arcosa (NYSE:ACA) are both construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, valuation, earnings, analyst recommendations, risk and institutional ownership.

Earnings and Valuation

This table compares Caesarstone and Arcosa”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Caesarstone	$397.23 million	0.12	-$137.47 million	($3.98)	-0.34
Arcosa	$2.88 billion	2.23	$208.40 million	$4.53	28.97

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

Institutional & Insider Ownership

33.7% of Caesarstone shares are owned by institutional investors. Comparatively, 90.7% of Arcosa shares are owned by institutional investors. 1.8% of Arcosa shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Caesarstone and Arcosa, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Caesarstone	1	0	0	0	1.00
Arcosa	1	0	3	1	2.80

Arcosa has a consensus target price of $132.50, indicating a potential upside of 0.98%. Given Arcosa’s stronger consensus rating and higher possible upside, analysts plainly believe Arcosa is more favorable than Caesarstone.

Volatility & Risk

Caesarstone has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500. Comparatively, Arcosa has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Profitability

This table compares Caesarstone and Arcosa’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Caesarstone	-34.60%	-24.33%	-10.79%
Arcosa	7.88%	8.52%	4.41%

Summary

Arcosa beats Caesarstone on 15 of the 15 factors compared between the two stocks.

About Caesarstone

Caesarstone Ltd., together with its subsidiaries, designs, develops, manufactures, and markets engineered stone and other materials under the Caesarstone brand in the United States, Canada, Latin America, Australia, Asia, Europe, the Middle East and Africa, and Israel. The company’s engineered stone slabs are primarily used as indoor and outdoor kitchen countertops in the renovation and remodeling, and residential construction sectors. Its products are also used in other applications, such as vanity tops, wall panels, back splashes, floor tiles, stairs, furniture, and other interior and exterior surfaces that are used in various residential and non-residential applications. The company also offers porcelain products under the Lioli brand for countertops, flooring, and cladding applications; sells natural stone, sinks, and various ancillary fabrication tools and materials; and resells natural stones, as well as various ancillaries, and fabrication and installation accessories, as well as provides fabrication and installation services. It sells its products directly to wholesalers, resellers, and fabricators; and through direct sales force and indirect network of independent distributors. The company was formerly known as Caesarstone Sdot Yam Ltd. and changed its name to Caesarstone Ltd. in June 2016. Caesarstone Ltd. was founded in 1987 and is headquartered in Menashe, Israel.

About Arcosa

Arcosa, Inc., together with its subsidiaries, provides infrastructure-related products and solutions for the construction, engineered structures, and transportation markets in the United States. It operates through three segments: Construction Products, Engineered Structures, and Transportation Products. The Construction Products segment offers natural and recycled aggregates; specialty materials; and construction site support equipment, including trench shields and shoring products for residential and non-residential construction, and specialty/other products, as well as for infrastructure construction. The Engineered Structures segment offers utility structures, wind towers, traffic structures, and telecommunication structures for electricity transmission and distribution, wind power generation, highway road construction, and wireless communication markets. The Transportation Products segment offers inland barges, fiberglass barge covers, winches, marine hardware, and steel components for railcars and transportation equipment; cast components for industrial and mining sectors; and axles, circular forgings, and coupling devices for freight, tank, locomotive, and passenger rail transportation equipment, as well as other industrial uses. Arcosa, Inc. was incorporated in 2018 and is headquartered in Dallas, Texas.