Contrasting Smart Sand (SND) & Armstrong World Industries (AWI)

Armstrong World Industries (NYSE: AWI) and Smart Sand (NASDAQ:SND) are both construction companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Valuation and Earnings

This table compares Armstrong World Industries and Smart Sand’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Armstrong World Industries $1.23 billion 2.65 $104.70 million $2.74 22.59
Smart Sand $59.23 million 5.69 $10.37 million $0.65 12.83

Armstrong World Industries has higher revenue and earnings than Smart Sand. Smart Sand is trading at a lower price-to-earnings ratio than Armstrong World Industries, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Armstrong World Industries and Smart Sand’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Armstrong World Industries 11.44% 46.62% 7.85%
Smart Sand 18.67% 14.41% 11.85%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Armstrong World Industries and Smart Sand, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Armstrong World Industries 0 4 4 0 2.50
Smart Sand 0 4 5 0 2.56

Armstrong World Industries presently has a consensus price target of $55.43, indicating a potential downside of 10.45%. Smart Sand has a consensus price target of $13.28, indicating a potential upside of 59.21%. Given Smart Sand’s stronger consensus rating and higher probable upside, analysts plainly believe Smart Sand is more favorable than Armstrong World Industries.

Institutional and Insider Ownership

51.3% of Smart Sand shares are owned by institutional investors. 0.6% of Armstrong World Industries shares are owned by company insiders. Comparatively, 46.4% of Smart Sand shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Armstrong World Industries has a beta of 1.73, suggesting that its share price is 73% more volatile than the S&P 500. Comparatively, Smart Sand has a beta of 3.33, suggesting that its share price is 233% more volatile than the S&P 500.

Summary

Smart Sand beats Armstrong World Industries on 9 of the 14 factors compared between the two stocks.

Armstrong World Industries Company Profile

Armstrong World Industries, Inc. (AWI) is a global producer of ceiling systems. The Company owns and operates the Building Products (Ceilings) segment. The Company designs, manufactures and sells ceiling systems (primarily mineral fiber, fiberglass wool and metal) around the world. Its products are used in commercial and institutional buildings. Its geographical segments include Americas (including Canada); Europe, Middle East and Africa (including Russia) (EMEA), and Pacific Rim. As of December 31, 2016, it had 15 manufacturing plants in eight countries, including six plants located throughout the United States. Its Americas segment sells products for use in single and multi-family housing. It sells commercial products to building materials distributors re-selling its products to contractors, subcontractors’ alliances, architect and design firms, and facility owners. Residential ceiling products are sold in the Americas primarily to wholesalers and retailers.

Smart Sand Company Profile

Smart Sand, Inc. is a producer of Northern White raw frac sand, which is a proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells. The Company sells its products primarily to oil and natural gas exploration and production companies and oilfield service companies under a combination of long-term take-or-pay contracts and spot sales in the open market. It owns and operates a raw frac sand mine and related processing facility near Oakdale, Wisconsin. In addition to the Oakdale facility, it owns a second property in Jackson County, Wisconsin, known as Hixton site. Its sand reserves include a balanced concentration of coarse (20/40, 30/50 and 40/70 gradation) sands and fine (60/140 gradation) sand. Its reserves contain deposits of approximately 20% of 20/40 and coarser substrate, over 40% of 40/70 mesh substrate and approximately 40% of 100-mesh substrate. Its 30/50 gradation is a derivative of the 20/40 and 40/70 blends.

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