Smith-Midland (NASDAQ:SMID) versus Arcosa (NYSE:ACA) Critical Survey

Smith-Midland (NASDAQ:SMID) and Arcosa (NYSE:ACA) are both materials companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, risk, institutional ownership and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Smith-Midland and Arcosa, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smith-Midland	0	1	0	0	2.00
Arcosa	0	4	3	0	2.43

Arcosa has a consensus price target of $141.25, indicating a potential downside of 5.33%. Given Arcosa’s stronger consensus rating and higher probable upside, analysts clearly believe Arcosa is more favorable than Smith-Midland.

Insider and Institutional Ownership

49.9% of Smith-Midland shares are held by institutional investors. Comparatively, 90.7% of Arcosa shares are held by institutional investors. 3.8% of Smith-Midland shares are held by company insiders. Comparatively, 1.8% of Arcosa shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk & Volatility

Smith-Midland has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500. Comparatively, Arcosa has a beta of 1.08, suggesting that its stock price is 8% more volatile than the S&P 500.

Profitability

This table compares Smith-Midland and Arcosa’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smith-Midland	8.59%	14.06%	8.75%
Arcosa	17.90%	7.90%	4.22%

Valuation and Earnings

This table compares Smith-Midland and Arcosa”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smith-Midland	$89.50 million	1.24	$12.51 million	$1.45	14.39
Arcosa	$2.88 billion	2.54	$208.40 million	$9.98	14.95

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

Summary

Arcosa beats Smith-Midland on 10 of the 14 factors compared between the two stocks.

About Smith-Midland

Smith-Midland Corporation is a precast concrete manufacturer and construction products company headquartered in Midland, Virginia. The company develops, manufactures and markets precast concrete systems for the commercial, industrial, transportation, utility and residential construction markets. Its products include modular precast concrete buildings, utility and storage structures, highway and traffic barriers, sound walls, architectural panels, retaining walls and other customized precast components.

About Arcosa

Arcosa, Inc. is a North American provider of products and materials used in infrastructure, construction, energy and transportation markets. The company became an independent public company in 2018 after being spun off from Trinity Industries. Its businesses include construction materials such as natural and recycled aggregates and specialty materials, as well as engineered structures for electric utilities, telecommunications and wind energy. Arcosa also makes products for transportation and infrastructure applications.