Contrasting TopBuild (NYSE:BLD) & Knife River (NYSE:KNF)

Knife River (NYSE:KNF) and TopBuild (NYSE:BLD) are both construction companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Earnings & Valuation

This table compares Knife River and TopBuild”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Knife River	$3.15 billion	1.60	$157.07 million	$2.76	32.15
TopBuild	$5.41 billion	2.23	$521.73 million	$18.30	23.41

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

Insider and Institutional Ownership

80.1% of Knife River shares are held by institutional investors. Comparatively, 95.7% of TopBuild shares are held by institutional investors. 0.4% of Knife River shares are held by company insiders. Comparatively, 0.5% of TopBuild 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Knife River	4.58%	9.35%	3.96%
TopBuild	8.95%	23.53%	8.61%

Risk and Volatility

Knife River has a beta of 0.55, suggesting that its share price is 45% less volatile than the S&P 500. Comparatively, TopBuild has a beta of 1.85, suggesting that its share price is 85% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Knife River and TopBuild, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Knife River	1	3	6	0	2.50
TopBuild	1	9	5	1	2.38

Knife River currently has a consensus price target of $98.00, suggesting a potential upside of 10.43%. TopBuild has a consensus price target of $456.28, suggesting a potential upside of 6.50%. Given Knife River’s stronger consensus rating and higher probable upside, analysts clearly believe Knife River is more favorable than TopBuild.

Summary

TopBuild beats Knife River on 11 of the 15 factors compared between the two stocks.

About Knife River

Knife River Corporation, together with its subsidiaries, provides aggregates- led construction materials and contracting services in the United States. It operates through Pacific, Northwest, Mountain, Central, and Energy Services segments. The company mines, processes, and sells construction aggregates, including crushed stone and sand, and gravel; and produces and sells asphalt and ready-mix concrete. It also provides contracting service, such as heavy-civil construction, asphalt and concrete paving, and site development and grading. In addition, the company sells cement, merchandise, and other building materials and related services. The company sells its construction materials to public and private-sector customers, including federal, state, and municipal governments, as well as industrial, commercial and residential developers, and other private parties; and provides its contracting services to public-sector customers for the development and servicing of highways, local roads, bridges, and other public-infrastructure projects. Knife River Corporation was founded in 1917 and is based in Bismarck, North Dakota.

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.