American Woodmark (NASDAQ:AMWD) and MasterBrand (NYSE:MBC) Critical Survey

American Woodmark (NASDAQ:AMWD) and MasterBrand (NYSE:MBC) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Insider & Institutional Ownership

95.5% of American Woodmark shares are owned by institutional investors. Comparatively, 87.3% of MasterBrand shares are owned by institutional investors. 1.3% of American Woodmark shares are owned by company insiders. Comparatively, 1.4% of MasterBrand shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk and Volatility

American Woodmark has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500. Comparatively, MasterBrand has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500.

Earnings & Valuation

This table compares American Woodmark and MasterBrand”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
American Woodmark	$1.71 billion	0.45	$99.46 million	$6.48	8.08
MasterBrand	$2.70 billion	0.51	$125.90 million	$0.78	13.91

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for American Woodmark and MasterBrand, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
American Woodmark	1	1	2	0	2.25
MasterBrand	1	0	1	0	2.00

American Woodmark currently has a consensus price target of $83.33, suggesting a potential upside of 59.17%. MasterBrand has a consensus price target of $15.00, suggesting a potential upside of 38.25%. Given American Woodmark’s stronger consensus rating and higher probable upside, analysts clearly believe American Woodmark is more favorable than MasterBrand.

Profitability

This table compares American Woodmark and MasterBrand’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
American Woodmark	5.82%	11.09%	6.35%
MasterBrand	3.74%	12.60%	5.75%

About American Woodmark

American Woodmark Corporation manufactures and distributes kitchen, bath, office, home organization, and hardware products for the remodelling and new home construction markets in the United States. The company offers made-to-order and cash and carry products. It also provides turnkey installation services to its direct builder customers through a network of eight service centers. The company sells its products under the American Woodmark, Timberlake, Shenandoah Cabinetry, Waypoint Living Spaces, Estate, Stor-It-All, and Professional Cabinet Solutions brands, as well as Hampton Bay, Glacier Bay, Style Selections, Allen + Roth, Home Decorators Collection, and Project Source. It markets its products directly to home centers and builders, as well as through independent dealers and distributors. The company was incorporated in 1980 and is based in Winchester, Virginia.

About MasterBrand

MasterBrand, Inc. engages in the manufacture and sale of residential cabinets in the United States and Canada. The company offers a range of residential cabinetry products for the kitchen, bathroom, and other parts of the home. It sells its products to remodeling and new construction markets through dealers, retailers, and builders. The company was formerly known as United Cabinet Incorporated. MasterBrand, Inc. was founded in 1954 and is headquartered in Beachwood, Ohio.