Deltic Timber Corporation (NYSE: DEL) and Universal Forest Products (NASDAQ:UFPI) are both small-cap construction companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitabiliy and analyst recommendations.
Valuation & Earnings
This table compares Deltic Timber Corporation and Universal Forest Products’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Deltic Timber Corporation||$221.95 million||4.07||$46.71 million||$0.82||90.32|
|Universal Forest Products||$3.40 billion||0.53||$212.29 million||$5.05||17.53|
Universal Forest Products has higher revenue and earnings than Deltic Timber Corporation. Universal Forest Products is trading at a lower price-to-earnings ratio than Deltic Timber Corporation, indicating that it is currently the more affordable of the two stocks.
Deltic Timber Corporation pays an annual dividend of $0.40 per share and has a dividend yield of 0.5%. Universal Forest Products pays an annual dividend of $0.90 per share and has a dividend yield of 1.0%. Deltic Timber Corporation pays out 48.8% of its earnings in the form of a dividend. Universal Forest Products pays out 17.8% 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. Universal Forest Products is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility & Risk
Deltic Timber Corporation has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, Universal Forest Products has a beta of 1.89, indicating that its share price is 89% more volatile than the S&P 500.
Insider & Institutional Ownership
81.0% of Deltic Timber Corporation shares are owned by institutional investors. Comparatively, 81.3% of Universal Forest Products shares are owned by institutional investors. 12.1% of Deltic Timber Corporation shares are owned by company insiders. Comparatively, 3.4% of Universal Forest Products shares are owned 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.
This table compares Deltic Timber Corporation and Universal Forest Products’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Deltic Timber Corporation||4.47%||4.02%||1.79%|
|Universal Forest Products||3.03%||12.03%||7.81%|
This is a breakdown of current ratings and target prices for Deltic Timber Corporation and Universal Forest Products, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Deltic Timber Corporation||1||5||4||0||2.30|
|Universal Forest Products||0||0||1||0||3.00|
Deltic Timber Corporation currently has a consensus price target of $47.20, suggesting a potential downside of 36.27%. Universal Forest Products has a consensus price target of $110.00, suggesting a potential upside of 24.22%. Given Universal Forest Products’ stronger consensus rating and higher possible upside, analysts plainly believe Universal Forest Products is more favorable than Deltic Timber Corporation.
Universal Forest Products beats Deltic Timber Corporation on 11 of the 16 factors compared between the two stocks.
Deltic Timber Corporation Company Profile
Deltic Timber Corporation is a vertically integrated natural resources company. The Company is engaged in the growing and harvesting of timber and the manufacturing and marketing of lumber and medium density fiberboard (MDF). It operates through four segments: Woodlands, which manages all aspects of the Company’s timberlands; Manufacturing, which consists of its approximately two sawmills that manufacture a range of softwood lumber products and the Del-Tin Fiber plant that produces MDF; Real Estate, which includes the Company’s four real estate developments and a related country club operation, and Corporate. It is also engaged in real estate development in central Arkansas. As of December 31, 2016, it developed and operated its own seed orchard. Its sawmills are located at Ola in central Arkansas and at Waldo in south Arkansas. It is engaged in developing the Chenal Valley, which is an upscale planned community, with approximately 4,300 acres of residential and commercial properties.
Universal Forest Products Company Profile
Universal Forest Products, Inc. is a holding company. The Company, through its subsidiaries, supplies wood, wood composite and other products to three primary markets, such as retail, construction and industrial. Its segments include North, South, West, Alternative Materials, International, idX Holdings, Inc. (idX) and Corporate divisions. idX is a designer, manufacturer and installer of in-store environments. It designs, manufactures and markets wood and wood-alternative products for national home centers and other retailers; structural lumber and other products for the manufactured housing industry; engineered wood components for residential and commercial construction; specialty wood packaging, components and packing materials for various industries, and customized interior fixtures used in a range of retail stores, commercial and other structures. Its customers comprising retail market are national home center retailers and retail-oriented regional lumberyards, among others.
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