Limbach (LMB) vs. TopBuild (BLD) Financial Analysis

Limbach (NASDAQ: LMB) and TopBuild (NYSE:BLD) are both construction companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, risk, valuation and analyst recommendations.

Analyst Recommendations

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This is a breakdown of recent ratings and target prices for Limbach and TopBuild, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Limbach 0 0 1 0 3.00
TopBuild 1 1 3 0 2.40

Limbach presently has a consensus target price of $18.00, indicating a potential upside of 35.34%. TopBuild has a consensus target price of $74.00, indicating a potential downside of 4.77%. Given Limbach’s stronger consensus rating and higher probable upside, research analysts clearly believe Limbach is more favorable than TopBuild.

Profitability

This table compares Limbach and TopBuild’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Limbach -0.65% -1.14% -0.27%
TopBuild 8.30% 10.65% 5.87%

Insider and Institutional Ownership

28.0% of Limbach shares are held by institutional investors. Comparatively, 94.7% of TopBuild shares are held by institutional investors. 82.9% of Limbach shares are held by company insiders. Comparatively, 1.3% of TopBuild shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Limbach and TopBuild’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Limbach $485.74 million 0.21 $1.87 million $0.22 60.45
TopBuild $1.91 billion 1.45 $158.13 million $2.78 27.95

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

Volatility & Risk

Limbach has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500. Comparatively, TopBuild has a beta of 0.57, indicating that its stock price is 43% less volatile than the S&P 500.

Summary

TopBuild beats Limbach on 9 of the 14 factors compared between the two stocks.

Limbach Company Profile

Limbach Holdings, Inc. provides commercial specialty contractor services in the United States. It operates in two segments, Construction and Service. The company provides services in the areas of HVAC (heating, ventilation, and air-conditioning), plumbing, electrical, and building controls for the design and construction of new and renovated buildings; maintenance services; and equipment upgrades. Its facility services comprise mechanical construction, HVAC service and maintenance, energy audits and retrofits, engineering and design build, constructability evaluation, equipment and materials selection, offsite/prefab construction, and sustainable building solutions and practices. The company’s customers include healthcare facilities; education, including schools and universities; sports and amusement, including arenas and related facilities; transportation, including passenger terminals and maintenance facilities for rail and airports; government facilities, including federal, state, and local agencies; hospitality, including hotels and resorts; corporate and commercial office buildings; retail and mixed use; residential multifamily apartment buildings (excluding condominiums); and industrial manufacturing. It serves customers primarily located in Florida, California, Massachusetts, New Jersey, Pennsylvania, Maryland, Virginia, West Virginia, Ohio, Michigan, and Washington, D.C. The company was founded in 1901 and is headquartered in Pittsburgh, Pennsylvania.

TopBuild Company Profile

TopBuild Corp. engages in the installation, distribution, and sale of insulation and other building products to the United States construction industry. The company operates in two segments, Installation and Distribution. It offers rain gutters, garage doors, fireplaces, fireproofing and firestopping products, shower enclosures, closet shelves, accessories, and other building products; and residential insulation services. The company also provides various services and tools that are designed to assist builders in applying the principles of building science to new home construction, which includes pre-construction plan reviews, various inspection services, and diagnostic testing; and home energy rating services. It serves single-family homebuilders, local/single-family custom builders, multi-family builders, commercial general contractors, remodelers, and individual homeowners, as well as insulation contractors, gutter contractors, weatherization contractors, other contractors, dealers, metal building erectors, and modular home builders. TopBuild Corp. has approximately 175 installation branches located in 41 states, and 70 distribution centers in 32 states. The company was formerly known as Masco SpinCo Corp. and changed its name to TopBuild Corp. in March 2015. TopBuild Corp. was incorporated in 2015 and is headquartered in Daytona Beach, Florida.

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