Critical Analysis: Worthington Enterprises (NYSE:WOR) & Louisiana-Pacific (NYSE:LPX)

Louisiana-Pacific (NYSE:LPX) and Worthington Enterprises (NYSE:WOR) are both mid-cap construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, earnings, risk, institutional ownership, profitability, analyst recommendations and valuation.

Dividends

Louisiana-Pacific pays an annual dividend of $1.12 per share and has a dividend yield of 1.2%. Worthington Enterprises pays an annual dividend of $0.68 per share and has a dividend yield of 1.0%. Louisiana-Pacific pays out 19.6% of its earnings in the form of a dividend. Worthington Enterprises pays out 57.6% 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. Louisiana-Pacific has raised its dividend for 7 consecutive years. Louisiana-Pacific is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and price targets for Louisiana-Pacific and Worthington Enterprises, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Louisiana-Pacific	2	2	4	0	2.25
Worthington Enterprises	1	1	1	1	2.50

Louisiana-Pacific presently has a consensus target price of $106.63, suggesting a potential upside of 16.62%. Worthington Enterprises has a consensus target price of $59.00, suggesting a potential downside of 8.90%. Given Louisiana-Pacific’s higher possible upside, analysts plainly believe Louisiana-Pacific is more favorable than Worthington Enterprises.

Risk & Volatility

Louisiana-Pacific has a beta of 1.89, indicating that its share price is 89% more volatile than the S&P 500. Comparatively, Worthington Enterprises has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.

Profitability

This table compares Louisiana-Pacific and Worthington Enterprises’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Louisiana-Pacific	13.74%	23.75%	15.50%
Worthington Enterprises	8.33%	16.66%	9.21%

Insider and Institutional Ownership

94.7% of Louisiana-Pacific shares are owned by institutional investors. Comparatively, 51.6% of Worthington Enterprises shares are owned by institutional investors. 1.4% of Louisiana-Pacific shares are owned by company insiders. Comparatively, 37.5% of Worthington Enterprises shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Louisiana-Pacific and Worthington Enterprises”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Louisiana-Pacific	$2.94 billion	2.16	$420.00 million	$5.70	16.04
Worthington Enterprises	$1.15 billion	2.80	$96.05 million	$1.18	54.89

Louisiana-Pacific has higher revenue and earnings than Worthington Enterprises. Louisiana-Pacific is trading at a lower price-to-earnings ratio than Worthington Enterprises, indicating that it is currently the more affordable of the two stocks.

Summary

Louisiana-Pacific beats Worthington Enterprises on 13 of the 18 factors compared between the two stocks.

About Louisiana-Pacific

Louisiana-Pacific Corporation, together with its subsidiaries, provides building solutions primarily for use in new home construction, repair and remodeling, and outdoor structure markets. It operates through Siding, Oriented Strand Board, LP South America, and Other segments. The Siding segment offers LP SmartSide trim and siding products, LP SmartSide ExpertFinish trim and siding products, LP BuilderSeries lap siding products, and LP Outdoor Building Solutions; and engineered wood siding, trim, soffit, and fascia products. Its Oriented Strand Board segment manufactures and distributes oriented strand board structural panel products comprising LP TechShield radiant barriers, LP WeatherLogic air and water barriers, LP Legacy premium sub-flooring products, LP NovaCore, LP FlameBlock fire-rated sheathing products, and LP TopNotch sub-flooring products. The LP South America segment manufactures and distributes oriented strand board structural panel and siding products. This segment distributes and sells related products for the region's transition to wood frame construction. It offers timber and timberlands and other products and services. sells its products primarily to retailers, wholesalers, and homebuilding and industrial businesses in North America and South America, Asia, Australia, and Europe. The company was incorporated in 1972 and is headquartered in Nashville, Tennessee.

About Worthington Enterprises

Worthington Enterprises, Inc. operates as an industrial manufacturing company. It operates through three segments: Building Products, Consumer Products, and Sustainable Energy Solutions. The Building Products segment sells refrigerant and LPG cylinders, well water and expansion tanks, fire suppression tanks, chemical tanks, and foam and adhesive tanks for gas producers, and distributors. The Consumer Products segment provides products in the tools, outdoor living, and celebrations end markets. Its products include propane-filled cylinders for torches, camping stoves and other applications, LPG cylinders, handheld torches, helium-filled balloon kits, specialized hand tools and instruments, and drywall tools and accessories This segment sells its products primarily to mass merchandisers, retailers, and distributors under the Coleman, Bernzomatic, Balloon Time, Mag-Torch, General, Garden-Weasel, Pactool International, Hawkeye, Worthington Pro Grade, and Level5 brands. The Sustainable Energy Solutions segment sells onboard fueling systems and services, as well as gas containment solutions and services for storage, transport, and distribution of industrial gases. It includes high pressure and acetylene cylinders for life support systems and alternative fuel cylinders used to hold CNG and hydrogen for automobiles, buses, and light-duty trucks. The company was formerly known as Worthington Industries, Inc. Worthington Enterprises, Inc. was founded in 1955 and is headquartered in Columbus, Ohio.