Critical Analysis: GMS (NYSE:GMS) and Jewett-Cameron Trading (NASDAQ:JCTC)

Jewett-Cameron Trading (NASDAQ:JCTC) and GMS (NYSE:GMS) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitability, earnings, dividends and institutional ownership.

Analyst Recommendations

This is a summary of current ratings for Jewett-Cameron Trading and GMS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Jewett-Cameron Trading	0	0	0	0	0.00
GMS	0	7	1	1	2.33

GMS has a consensus target price of $90.58, suggesting a potential downside of 8.31%. Given GMS’s stronger consensus rating and higher possible upside, analysts clearly believe GMS is more favorable than Jewett-Cameron Trading.

Institutional and Insider Ownership

26.1% of Jewett-Cameron Trading shares are held by institutional investors. Comparatively, 95.3% of GMS shares are held by institutional investors. 1.3% of Jewett-Cameron Trading shares are held by company insiders. Comparatively, 1.9% of GMS shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Jewett-Cameron Trading and GMS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Jewett-Cameron Trading	-2.69%	-5.22%	-4.64%
GMS	2.09%	16.97%	6.28%

Risk & Volatility

Jewett-Cameron Trading has a beta of 0.1, suggesting that its stock price is 90% less volatile than the S&P 500. Comparatively, GMS has a beta of 1.62, suggesting that its stock price is 62% more volatile than the S&P 500.

Valuation and Earnings

This table compares Jewett-Cameron Trading and GMS”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Jewett-Cameron Trading	$47.15 million	0.28	$720,000.00	($0.36)	-10.44
GMS	$5.51 billion	0.68	$115.47 million	$2.89	34.18

GMS has higher revenue and earnings than Jewett-Cameron Trading. Jewett-Cameron Trading is trading at a lower price-to-earnings ratio than GMS, indicating that it is currently the more affordable of the two stocks.

Summary

GMS beats Jewett-Cameron Trading on 15 of the 15 factors compared between the two stocks.

About Jewett-Cameron Trading

Jewett-Cameron Trading Company Ltd. is a supplier of `Value-added` building materials to major home improvement center chains in the western United States. The Company concentrates on the residential repair and remodeling segment of the building materials industry.

About GMS

GMS Inc. distributes wallboard, ceilings, steel framing and complementary construction products in the United States and Canada. The company offers ceilings products, including suspended mineral fibers, soft fibers, and metal ceiling systems primarily used in offices, hotels, hospitals, retail facilities, schools, and various other commercial and institutional buildings. It also provides steel framing products, such as steel tracks, studs, and various other steel products used to frame the interior walls of a commercial or institutional building, as well as ancillary products comprising tools, fasteners, insulation, EIFS and stucco, lumber and other wood products, ready-mix joint compound, and safety products. In addition, the company distributes a wallboard, ceilings, steel framing, and construction products, as well as commercial and residential building materials. It also operates through tool sales, rental, and service centers, as well as network of distribution centers. The company serves professional contractors and homebuilders. GMS Inc. was founded in 1971 and is headquartered in Tucker, Georgia.