Frontdoor (NASDAQ:FTDR) & TopBuild (NYSE:BLD) Financial Review

Frontdoor (NASDAQ:FTDR) and TopBuild (NYSE:BLD) are both construction companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Earnings and Valuation

This table compares Frontdoor and TopBuild”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frontdoor	$2.09 billion	2.06	$255.00 million	$3.49	17.56
TopBuild	$5.41 billion	2.12	$521.73 million	$17.80	22.93

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

Profitability

This table compares Frontdoor and TopBuild’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frontdoor	12.22%	118.62%	14.20%
TopBuild	8.95%	23.53%	8.61%

Risk and Volatility

Frontdoor has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500. Comparatively, TopBuild has a beta of 1.85, meaning that its share price is 85% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Frontdoor and TopBuild, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frontdoor	0	3	3	1	2.71
TopBuild	0	9	5	1	2.47

Frontdoor presently has a consensus target price of $68.60, suggesting a potential upside of 11.91%. TopBuild has a consensus target price of $466.77, suggesting a potential upside of 14.38%. Given TopBuild’s higher probable upside, analysts clearly believe TopBuild is more favorable than Frontdoor.

Insider and Institutional Ownership

95.7% of TopBuild shares are held by institutional investors. 1.6% of Frontdoor shares are held by company insiders. Comparatively, 0.5% of TopBuild shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

TopBuild beats Frontdoor on 9 of the 14 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 TopBuild

TopBuild Corp., together with its subsidiaries, engages in the installation and distribution of insulation and other building material products to the construction industry. The company operates in two segments, Installation and Specialty Distribution. It provides insulation products and accessories, glass and windows, rain gutters, garage doors, fireplaces, roofing materials, closet shelving, and other products. The company also offers insulation installation services for fiberglass batts and rolls, blown-in loose fill fiberglass, polyurethane spray foam, and blown-in loose fill cellulose applications. In addition, it distributes building and mechanical insulation, insulation accessories, and other building product materials for the residential, commercial, and industrial end markets. The company serves single-family homebuilders, single-family custom builders, multi-family builders, commercial general contractors, remodelers, and individual homeowners, as well as insulation contractors, gutter contractors, weatherization contractors, other contractors, dealers, metal building erectors, and modular home builders. It operates installation branches and distribution centers in the United States and Canada. The company was formerly known as Masco SpinCo Corp. and changed its name to TopBuild Corp. in March 2015. TopBuild Corp. was incorporated in 2015 and is headquartered in Daytona Beach, Florida.