Critical Comparison: Summit Materials (SUM) vs. GCP Applied Technologies (GCP)

Summit Materials (NYSE: SUM) and GCP Applied Technologies (NYSE:GCP) are both mid-cap construction companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitabiliy, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Profitability

This table compares Summit Materials and GCP Applied Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Summit Materials 2.46% 10.43% 3.36%
GCP Applied Technologies 0.26% -44.32% 5.24%

Insider and Institutional Ownership

81.6% of GCP Applied Technologies shares are owned by institutional investors. 2.0% of Summit Materials shares are owned by company insiders. Comparatively, 0.7% of GCP Applied Technologies shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for Summit Materials and GCP Applied Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summit Materials 0 2 6 0 2.75
GCP Applied Technologies 0 0 4 0 3.00

Summit Materials currently has a consensus price target of $30.33, suggesting a potential upside of 2.82%. GCP Applied Technologies has a consensus price target of $35.50, suggesting a potential upside of 16.39%. Given GCP Applied Technologies’ stronger consensus rating and higher possible upside, analysts plainly believe GCP Applied Technologies is more favorable than Summit Materials.

Earnings & Valuation

This table compares Summit Materials and GCP Applied Technologies’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Summit Materials $1.76 billion 1.80 $368.45 million $0.56 52.42
GCP Applied Technologies $1.34 billion 1.63 $214.90 million $0.04 762.50

Summit Materials has higher revenue and earnings than GCP Applied Technologies. Summit Materials is trading at a lower price-to-earnings ratio than GCP Applied Technologies, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Summit Materials has a beta of 2.06, meaning that its share price is 106% more volatile than the S&P 500. Comparatively, GCP Applied Technologies has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.

Summary

Summit Materials beats GCP Applied Technologies on 9 of the 14 factors compared between the two stocks.

About Summit Materials

Summit Materials, Inc. is a construction materials company. The Company operates through three segments: West, East and Cement. As of December 31, 2016, the Company had operations in 21 states in the United States and in British Columbia, Canada. The Company’s materials include aggregates, which it supplies across the United States, and in British Columbia, Canada, and cement, which it supplies along the Mississippi River from Minneapolis to New Orleans. Within its markets, it offers construction materials and related downstream products through its vertical integration. In addition to supplying of aggregates to its customers, the Company also uses its materials internally to produce ready-mix concrete and asphalt paving mix. Its construction materials operations consists of aggregates production, including crushed stone and construction sand and gravel, cement and ready-mixed concrete production, and asphalt paving mix production.

About GCP Applied Technologies

GCP Applied Technologies Inc. produces and sells specialty construction chemicals, specialty building materials, and packaging sealants and coatings. The Company operates through two segments: Specialty Construction Chemicals and Specialty Building Materials. The Specialty Construction Chemicals segment manufactures and markets products to manage performance of Portland cement, and materials based on Portland cement, such as concrete admixtures and cement additives, as well as concrete production management systems. The Specialty Building Materials segment manufactures and markets building envelope products, residential building products and specialty construction products. Its brands include ADVA, CBA, MIRA, ADPRUFE, DARABLEND and APPERTA.

Receive News & Ratings for Summit Materials Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Summit Materials Inc. and related companies with MarketBeat.com's FREE daily email newsletter.

Latest News

Leave a Reply