Owens Corning (NYSE:OC – Get Free Report) and United Rentals (NYSE:URI – Get Free Report) are both construction companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.
Earnings and Valuation
This table compares Owens Corning and United Rentals”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Owens Corning | $10.10 billion | 0.98 | -$522.00 million | ($6.40) | -19.27 |
| United Rentals | $16.10 billion | 3.74 | $2.49 billion | $39.20 | 24.50 |
Insider and Institutional Ownership
88.4% of Owens Corning shares are owned by institutional investors. Comparatively, 96.3% of United Rentals shares are owned by institutional investors. 0.9% of Owens Corning shares are owned by company insiders. Comparatively, 0.5% of United Rentals 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.
Analyst Ratings
This is a breakdown of current ratings and target prices for Owens Corning and United Rentals, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Owens Corning | 1 | 5 | 9 | 1 | 2.63 |
| United Rentals | 1 | 3 | 13 | 0 | 2.71 |
Owens Corning currently has a consensus price target of $145.09, suggesting a potential upside of 17.65%. United Rentals has a consensus price target of $986.35, suggesting a potential upside of 2.69%. Given Owens Corning’s higher probable upside, research analysts clearly believe Owens Corning is more favorable than United Rentals.
Dividends
Owens Corning pays an annual dividend of $3.16 per share and has a dividend yield of 2.6%. United Rentals pays an annual dividend of $7.88 per share and has a dividend yield of 0.8%. Owens Corning pays out -49.4% of its earnings in the form of a dividend. United Rentals pays out 20.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Owens Corning has increased its dividend for 10 consecutive years and United Rentals has increased its dividend for 3 consecutive years. Owens Corning is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
Owens Corning has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, United Rentals has a beta of 1.68, indicating that its share price is 68% more volatile than the S&P 500.
Profitability
This table compares Owens Corning and United Rentals’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Owens Corning | -5.17% | 21.93% | 7.33% |
| United Rentals | 15.32% | 30.56% | 9.23% |
Summary
United Rentals beats Owens Corning on 12 of the 18 factors compared between the two stocks.
About Owens Corning
Owens Corning manufactures and sells building and construction materials in the United States, Europe, the Asia Pacific, and internationally. It operates in three segments: Roofing, Insulation, and Composites. The Roofing segment manufactures and sells laminate and strip asphalt roofing shingles, oxidized asphalt materials, and roofing components used in residential and commercial construction, and specialty applications. This segment sells its products through distributors, home centers, and lumberyards, as well as to roofing contractors for built-up roofing asphalt systems; and manufacturers in automotive, chemical, rubber, and construction industries. The Insulation segment manufactures and sells thermal and acoustical batts, loosefill insulation, spray foam insulation, foam sheathing and accessories under the Owens Corning PINK, and FIBERGLAS brands; and glass fiber pipe insulation, energy efficient flexible duct media, bonded and granulated mineral wool insulation, cellular glass insulation, and foam insulation under the FOAMULAR, FOAMGLAS, and Paroc brand names used in construction applications. This segment sells its products primarily to the insulation installers, home centers, lumberyards, retailers, and distributors. The Composites segment manufactures, fabricates, and sells glass reinforcements in the form of fiber; and glass fiber products in the form of fabrics, non-wovens, and composite lumber. Its products are used in building structures, roofing shingles, tubs and showers, pools, decking, flooring, pipes and tanks, poles, electrical equipment, and wind-energy turbine blades. This segment sells its products directly to parts molders, fabricators, and shingle manufacturers. The company was incorporated in 1938 and is headquartered in Toledo, Ohio.
About United Rentals
United Rentals, Inc., through its subsidiaries, operates as an equipment rental company. It operates in two segments, General Rentals and Specialty. The General Rentals segment rents general construction and industrial equipment includes backhoes, skid-steer loaders, forklifts, earthmoving equipment, and material handling equipment; aerial work platforms, such as boom and scissor lifts; and general tools and light equipment comprising pressure washers, water pumps, and power tools for construction and industrial companies, manufacturers, utilities, municipalities, homeowners, and government entities. The specialty segment rents specialty construction products, including trench safety equipment consists of trench shields, aluminum hydraulic shoring systems, slide rails, crossing plates, construction lasers, and line testing equipment for underground work; power and heating, ventilating, and air conditioning equipment, such as portable diesel generators, electrical distribution equipment, and temperature control equipment; fluid solutions equipment for fluid containment, transfer, and treatment; and mobile storage equipment and modular office space. This segment serves construction companies involved in infrastructure projects, and municipalities and industrial companies. It also sells aerial lifts, reach forklifts, telehandlers, compressors, and generators; construction consumables, tools, small equipment, and safety supplies; and parts for equipment that is owned by its customers, as well as provides repair and maintenance services. The company sells used equipment through its sales force, brokers, website, at auctions, and directly to manufacturers. The company operates in the United States, Canada, Europe, Australia, and New Zealand. United Rentals, Inc. was incorporated in 1997 and is headquartered in Stamford, Connecticut.
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