Head to Head Review: Fastenal (NASDAQ:FAST) and Builders FirstSource (NYSE:BLDR)

Builders FirstSource (NYSE:BLDR) and Fastenal (NASDAQ:FAST) are both large-cap retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, profitability, valuation and risk.

Profitability

This table compares Builders FirstSource and Fastenal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Builders FirstSource	5.66%	28.02%	11.18%
Fastenal	15.13%	31.99%	24.36%

Analyst Ratings

This is a summary of recent ratings and price targets for Builders FirstSource and Fastenal, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Builders FirstSource	0	4	15	1	2.85
Fastenal	1	8	2	0	2.09

Builders FirstSource currently has a consensus target price of $163.11, suggesting a potential upside of 41.46%. Fastenal has a consensus target price of $40.40, suggesting a potential downside of 0.90%. Given Builders FirstSource’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Builders FirstSource is more favorable than Fastenal.

Insider & Institutional Ownership

95.5% of Builders FirstSource shares are owned by institutional investors. Comparatively, 81.4% of Fastenal shares are owned by institutional investors. 1.8% of Builders FirstSource shares are owned by insiders. Comparatively, 0.4% of Fastenal shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Builders FirstSource and Fastenal”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Builders FirstSource	$16.40 billion	0.78	$1.08 billion	$7.80	14.78
Fastenal	$7.55 billion	6.20	$1.15 billion	$1.00	40.77

Fastenal has lower revenue, but higher earnings than Builders FirstSource. Builders FirstSource is trading at a lower price-to-earnings ratio than Fastenal, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Builders FirstSource has a beta of 1.7, meaning that its share price is 70% more volatile than the S&P 500. Comparatively, Fastenal has a beta of 0.97, meaning that its share price is 3% less volatile than the S&P 500.

Summary

Builders FirstSource beats Fastenal on 9 of the 15 factors compared between the two stocks.

About Builders FirstSource

Builders FirstSource, Inc., together with its subsidiaries, manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, sub-contractors, remodelers, and consumers in the United States. It offers lumber and lumber sheet goods comprising dimensional lumber, plywood, and oriented strand board products that are used in on-site house framing; manufactured products, such as wood floor and roof trusses, floor trusses, wall panels, stairs, and engineered wood products; and windows, and interior and exterior door units, as well as interior trims and custom products comprising intricate mouldings, stair parts, and columns under the Synboard brand name. The company also provides specialty building products and services, including vinyl, composite and wood siding, exterior trims, metal studs, cement, roofing, insulation, wallboards, ceilings, cabinets, and hardware products; turn-key framing, shell construction, design assistance, and professional installation services. In addition, it offers software products, such as drafting, estimating, quoting, and virtual home design services, which provide software solutions to retailers, distributors, manufacturers, and homebuilders. The company was formerly known as BSL Holdings, Inc. and changed its name to Builders FirstSource, Inc. in October 1999. Builders FirstSource, Inc. was incorporated in 1998 and is based in Irving, Texas.

About Fastenal

Fastenal Company, together with its subsidiaries, engages in the wholesale distribution of industrial and construction supplies in the United States, Canada, Mexico, North America, and internationally. It offers fasteners, and related industrial and construction supplies under the Fastenal name. The company’s fastener products include threaded fasteners, bolts, nuts, screws, studs, and related washers that are used in manufactured products and construction projects, as well as in the maintenance and repair of machines. It also offers miscellaneous supplies and hardware, including pins, machinery keys, concrete anchors, metal framing systems, wire ropes, strut products, rivets, and related accessories. The company serves the manufacturing market comprising original equipment manufacturers; maintenance, repair, and operations customers; non-residential construction market; farmers, truckers, railroads, mining companies, schools, and retail trades; and oil exploration, production, and refinement companies, as well as federal, state, and local governmental entities. Fastenal Company was founded in 1967 and is headquartered in Winona, Minnesota.