Financial Analysis: Smith Douglas Homes (NYSE:SDHC) vs. FTAI Infrastructure (NASDAQ:FIP)

FTAI Infrastructure (NASDAQ:FIP) and Smith Douglas Homes (NYSE:SDHC) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Analyst Recommendations

This is a summary of recent ratings and target prices for FTAI Infrastructure and Smith Douglas Homes, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FTAI Infrastructure	1	0	2	0	2.33
Smith Douglas Homes	3	5	1	0	1.78

FTAI Infrastructure presently has a consensus target price of $11.00, suggesting a potential upside of 134.04%. Smith Douglas Homes has a consensus target price of $16.60, suggesting a potential downside of 17.02%. Given FTAI Infrastructure’s stronger consensus rating and higher probable upside, equities research analysts clearly believe FTAI Infrastructure is more favorable than Smith Douglas Homes.

Profitability

This table compares FTAI Infrastructure and Smith Douglas Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FTAI Infrastructure	-41.09%	-75.13%	-3.02%
Smith Douglas Homes	1.13%	0.12%	0.10%

Volatility & Risk

FTAI Infrastructure has a beta of 1.88, indicating that its stock price is 88% more volatile than the S&P 500. Comparatively, Smith Douglas Homes has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Valuation & Earnings

This table compares FTAI Infrastructure and Smith Douglas Homes”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FTAI Infrastructure	$331.50 million	1.65	-$223.65 million	($2.46)	-1.91
Smith Douglas Homes	$975.46 million	1.06	$16.07 million	$1.25	16.00

Smith Douglas Homes has higher revenue and earnings than FTAI Infrastructure. FTAI Infrastructure is trading at a lower price-to-earnings ratio than Smith Douglas Homes, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

87.4% of FTAI Infrastructure shares are held by institutional investors. 2.4% of FTAI Infrastructure shares are held by insiders. Comparatively, 82.7% of Smith Douglas Homes shares are held 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.

Summary

Smith Douglas Homes beats FTAI Infrastructure on 8 of the 14 factors compared between the two stocks.

About FTAI Infrastructure

FTAI Infrastructure Inc. focuses on acquiring, developing, and operating assets and businesses that represent infrastructure for customers in the transportation, energy, and industrial products industries in North America. The company operates through five segments: Railroad, Jefferson Terminal, Repauno, Power and Gas, and Sustainability and Energy Transition. It operates a multi-modal crude oil and refined products terminal, and other related assets. The company also has a 1,630-acre deep-water port located along the Delaware River with an underground storage cavern, a multipurpose dock, a rail-to-ship transloading system, and multiple industrial development opportunities; and a 1,660-acre multi-modal port located along the Ohio River with rail, dock, and multiple industrial development opportunities, including a power plant under construction. In addition, it operates six freight railroads and one switching facility. FTAI Infrastructure Inc. was incorporated in 2021 and is headquartered in New York, New York.

About Smith Douglas Homes

Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.