Critical Review: Arcosa (NYSE:ACA) versus Hillman Solutions (NASDAQ:HLMN)

Arcosa (NYSE:ACA) and Hillman Solutions (NASDAQ:HLMN) are both construction companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, valuation and institutional ownership.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arcosa	$2.88 billion	1.95	$208.40 million	$4.24	27.04
Hillman Solutions	$1.55 billion	1.12	$40.31 million	$0.21	42.24

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

Insider & Institutional Ownership

90.7% of Arcosa shares are held by institutional investors. Comparatively, 98.1% of Hillman Solutions shares are held by institutional investors. 1.8% of Arcosa shares are held by insiders. Comparatively, 4.9% of Hillman Solutions shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Arcosa and Hillman Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arcosa	7.23%	8.64%	4.41%
Hillman Solutions	2.60%	9.57%	4.91%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Arcosa and Hillman Solutions, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arcosa	0	2	2	1	2.80
Hillman Solutions	0	3	4	0	2.57

Arcosa presently has a consensus price target of $120.00, suggesting a potential upside of 4.65%. Hillman Solutions has a consensus price target of $11.33, suggesting a potential upside of 27.77%. Given Hillman Solutions’ higher possible upside, analysts plainly believe Hillman Solutions is more favorable than Arcosa.

Volatility and Risk

Arcosa has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, Hillman Solutions has a beta of 1.63, indicating that its share price is 63% more volatile than the S&P 500.

Summary

Hillman Solutions beats Arcosa on 8 of the 15 factors compared between the two stocks.

About Arcosa

Arcosa, Inc., together with its subsidiaries, provides infrastructure-related products and solutions for the construction, engineered structures, and transportation markets in the United States. It operates through three segments: Construction Products, Engineered Structures, and Transportation Products. The Construction Products segment offers natural and recycled aggregates; specialty materials; and construction site support equipment, including trench shields and shoring products for residential and non-residential construction, and specialty/other products, as well as for infrastructure construction. The Engineered Structures segment offers utility structures, wind towers, traffic structures, and telecommunication structures for electricity transmission and distribution, wind power generation, highway road construction, and wireless communication markets. The Transportation Products segment offers inland barges, fiberglass barge covers, winches, marine hardware, and steel components for railcars and transportation equipment; cast components for industrial and mining sectors; and axles, circular forgings, and coupling devices for freight, tank, locomotive, and passenger rail transportation equipment, as well as other industrial uses. Arcosa, Inc. was incorporated in 2018 and is headquartered in Dallas, Texas.

About Hillman Solutions

Founded in 1964 and headquartered in Cincinnati, Ohio, Hillman is a leading North American provider of complete hardware solutions, delivered with industry best customer service to over 40,000 locations. Hillman designs innovative product and merchandising solutions for complex categories that deliver an outstanding customer experience to home improvement centers, mass merchants, national and regional hardware stores, pet supply stores, and OEM & Industrial customers. Leveraging a world-class distribution and sales network, Hillman delivers a “small business” experience with “big business” efficiency.