Trex (TREX) & The Competition Critical Contrast

Trex (NYSE:TREX) is one of 93 public companies in the “Building Products” industry, but how does it compare to its competitors? We will compare Trex to related businesses based on the strength of its analyst recommendations, earnings, valuation, profitability, institutional ownership, risk and dividends.

Volatility and Risk

Trex has a beta of 1.46, suggesting that its stock price is 46% more volatile than the S&P 500. Comparatively, Trex’s competitors have a beta of 1.07, suggesting that their average stock price is 7% more volatile than the S&P 500.

Insider & Institutional Ownership

96.0% of Trex shares are held by institutional investors. Comparatively, 63.6% of shares of all “Building Products” companies are held by institutional investors. 0.9% of Trex shares are held by company insiders. Comparatively, 10.2% of shares of all “Building Products” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Trex and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Trex	14.68%	18.03%	11.76%
Trex Competitors	3.69%	-26.96%	5.10%

Earnings and Valuation

This table compares Trex and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Trex	$1.17 billion	$190.41 million	31.91
Trex Competitors	$4.00 billion	$4.65 billion	36.43

Trex’s competitors have higher revenue and earnings than Trex. Trex is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a summary of recent recommendations for Trex and its competitors, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Trex	1	5	13	0	2.63
Trex Competitors	740	3933	5066	238	2.48

Trex currently has a consensus target price of $55.18, indicating a potential upside of 0.54%. As a group, “Building Products” companies have a potential upside of 30.60%. Given Trex’s competitors higher probable upside, analysts plainly believe Trex has less favorable growth aspects than its competitors.

Summary

Trex beats its competitors on 7 of the 13 factors compared.

Trex Company Profile

Trex Company, Inc. manufactures and distributes composite decking, railing, and outdoor living products and accessories for residential and commercial markets in the United States. It offers decking products and accessories under the names Trex Transcend, Trex Select, Trex Signature, Trex Transcend Lineage, and Trex Enhance for protection against fading, staining, mold, and scratching; Trex Hideaway, a hidden fastening system; and Trex DeckLighting, a LED dimmable deck lighting for use on posts, floors, and steps. The company also provides Trex Transcend Railing products that are used in Trex decking products and other decking materials; Trex Select Railing products for a simple clean finished look; Trex Enhance Railing system; Trex Signature aluminum railing for a contemporary look; and Trex Select T-Rail railing products. In addition, it offers Trex Seclusions, a fencing product that includes structural posts, bottom and top rails, pickets, and decorative post caps. Further, the company acts as a licensor in various licensing agreements with third parties to manufacture and sell products under the Trex name, including Trex Outdoor Furniture; Trex RainEscape, an above joist deck drainage system; Trex Pergola, a cellular PVC product; Trex Latticeworks outdoor lattice boards; Trex Cornhole boards; Diablo Trex Blade, a saw blade for wood-alternative composite decking; Trex SpiralStairs and structural steel posts; and Trex Outdoor Kitchens, cabinetry, and Storage products. It sells its products through wholesale distributors, retail lumber dealers, and Home Depot and Lowe’s stores. Trex Company, Inc. was founded in 1996 and is headquartered in Winchester, Virginia.