FGI Industries (NASDAQ:FGI – Get Free Report) and Trex (NYSE:TREX – Get Free Report) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.
Institutional & Insider Ownership
96.0% of Trex shares are owned by institutional investors. 2.4% of FGI Industries shares are owned by insiders. Comparatively, 0.9% of Trex shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Profitability
This table compares FGI Industries and Trex’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| FGI Industries | -3.07% | 10.02% | 2.28% |
| Trex | 14.68% | 18.03% | 11.76% |
Analyst Ratings
This is a summary of current recommendations and price targets for FGI Industries and Trex, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| FGI Industries | 1 | 1 | 1 | 0 | 2.00 |
| Trex | 1 | 5 | 13 | 0 | 2.63 |
FGI Industries presently has a consensus target price of $13.00, suggesting a potential upside of 71.96%. Trex has a consensus target price of $55.18, suggesting a potential upside of 0.54%. Given FGI Industries’ higher probable upside, analysts plainly believe FGI Industries is more favorable than Trex.
Valuation and Earnings
This table compares FGI Industries and Trex”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| FGI Industries | $130.53 million | 0.11 | -$6.14 million | ($2.08) | -3.63 |
| Trex | $1.17 billion | 4.86 | $190.41 million | $1.72 | 31.91 |
Trex has higher revenue and earnings than FGI Industries. FGI Industries is trading at a lower price-to-earnings ratio than Trex, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
FGI Industries has a beta of 2.26, suggesting that its share price is 126% more volatile than the S&P 500. Comparatively, Trex has a beta of 1.46, suggesting that its share price is 46% more volatile than the S&P 500.
Summary
Trex beats FGI Industries on 11 of the 14 factors compared between the two stocks.
About FGI Industries
FGI Industries ltd. supplies kitchen and bath products in the United States, Canada, Europe, and internationally. The company sells sanitaryware products, such as toilets, sinks, pedestals, and toilet seats; wood and wood-substitute furniture for bathrooms, including vanities, mirrors, laundry, medicine cabinets, and other storage systems; shower systems; and customer kitchen cabinetry and other accessory items under the Foremost, avenue, contrac, Jetcoat, rosenberg, and Covered Bridge Cabinetry brand names. It sells its products through home center retailers, online retailers, distributors, and independent dealers. The company was incorporated in 2021 and is headquartered in East Hanover, New Jersey. FGI Industries Ltd. is a subsidiary of Foremost Groups Ltd.
About Trex
Trex Company, Inc. manufactures and distributes composite decking, railing, and outdoor living products and accessories for residential and commercial markets in the United States. It offers decking products and accessories under the names Trex Transcend, Trex Select, Trex Signature, Trex Transcend Lineage, and Trex Enhance for protection against fading, staining, mold, and scratching; Trex Hideaway, a hidden fastening system; and Trex DeckLighting, a LED dimmable deck lighting for use on posts, floors, and steps. The company also provides Trex Transcend Railing products that are used in Trex decking products and other decking materials; Trex Select Railing products for a simple clean finished look; Trex Enhance Railing system; Trex Signature aluminum railing for a contemporary look; and Trex Select T-Rail railing products. In addition, it offers Trex Seclusions, a fencing product that includes structural posts, bottom and top rails, pickets, and decorative post caps. Further, the company acts as a licensor in various licensing agreements with third parties to manufacture and sell products under the Trex name, including Trex Outdoor Furniture; Trex RainEscape, an above joist deck drainage system; Trex Pergola, a cellular PVC product; Trex Latticeworks outdoor lattice boards; Trex Cornhole boards; Diablo Trex Blade, a saw blade for wood-alternative composite decking; Trex SpiralStairs and structural steel posts; and Trex Outdoor Kitchens, cabinetry, and Storage products. It sells its products through wholesale distributors, retail lumber dealers, and Home Depot and Lowe’s stores. Trex Company, Inc. was founded in 1996 and is headquartered in Winchester, Virginia.
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