Owens Corning (NYSE:OC) and Frontdoor (NASDAQ:FTDR) Critical Contrast

Owens Corning (NYSE:OC) and Frontdoor (NASDAQ:FTDR) are both mid-cap construction companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Institutional and Insider Ownership

88.4% of Owens Corning shares are held by institutional investors. 0.9% of Owens Corning shares are held by company insiders. Comparatively, 1.5% of Frontdoor shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for Owens Corning and Frontdoor, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Owens Corning	2	4	10	1	2.59
Frontdoor	0	3	4	0	2.57

Owens Corning currently has a consensus price target of $151.58, indicating a potential upside of 41.03%. Frontdoor has a consensus price target of $68.60, indicating a potential upside of 22.85%. Given Owens Corning’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Owens Corning is more favorable than Frontdoor.

Earnings and Valuation

This table compares Owens Corning and Frontdoor”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Owens Corning	$10.10 billion	0.86	-$522.00 million	($6.40)	-16.79
Frontdoor	$2.09 billion	1.88	$255.00 million	$3.41	16.38

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

Profitability

This table compares Owens Corning and Frontdoor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Owens Corning	-5.17%	21.93%	7.33%
Frontdoor	12.18%	120.79%	14.09%

Risk and Volatility

Owens Corning has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500. Comparatively, Frontdoor has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.

Summary

Frontdoor beats Owens Corning on 8 of the 15 factors compared between the two stocks.

About Owens Corning

Owens Corning manufactures and sells building and construction materials in the United States, Europe, the Asia Pacific, and internationally. It operates in three segments: Roofing, Insulation, and Composites. The Roofing segment manufactures and sells laminate and strip asphalt roofing shingles, oxidized asphalt materials, and roofing components used in residential and commercial construction, and specialty applications. This segment sells its products through distributors, home centers, and lumberyards, as well as to roofing contractors for built-up roofing asphalt systems; and manufacturers in automotive, chemical, rubber, and construction industries. The Insulation segment manufactures and sells thermal and acoustical batts, loosefill insulation, spray foam insulation, foam sheathing and accessories under the Owens Corning PINK, and FIBERGLAS brands; and glass fiber pipe insulation, energy efficient flexible duct media, bonded and granulated mineral wool insulation, cellular glass insulation, and foam insulation under the FOAMULAR, FOAMGLAS, and Paroc brand names used in construction applications. This segment sells its products primarily to the insulation installers, home centers, lumberyards, retailers, and distributors. The Composites segment manufactures, fabricates, and sells glass reinforcements in the form of fiber; and glass fiber products in the form of fabrics, non-wovens, and composite lumber. Its products are used in building structures, roofing shingles, tubs and showers, pools, decking, flooring, pipes and tanks, poles, electrical equipment, and wind-energy turbine blades. This segment sells its products directly to parts molders, fabricators, and shingle manufacturers. The company was incorporated in 1938 and is headquartered in Toledo, Ohio.

About Frontdoor

Frontdoor, Inc. provides home warranties in the United States in the United States. Its customizable home warranties help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances. The company’s home warranty customers subscribe to an annual service plan agreement that covers the repair or replacement of principal components of approximately 20 home systems and appliances, including electrical, plumbing, water heaters, refrigerators, dishwashers, and ranges/ovens/cooktops, as well as electronics, pools, and spas and pumps; and heating, ventilation, and air conditioning systems. It also offers on-demand home services and a one-stop app experience for home repair and maintenance; and Streem technology, an app that empowers homeowners by connecting them in real time through video chat with qualified experts to diagnose and solve their problems. The company serves homeowners under the Frontdoor, American Home Shield, HSA, OneGuard, Landmark Home Warranty, Frontdoor logo, and Streem brands. The company was founded in 1971 and is headquartered in Memphis, Tennessee.