Reviewing Armstrong Flooring (AFI) and Armstrong World Industries (AWI)

Armstrong Flooring (NYSE: AFI) and Armstrong World Industries (NYSE:AWI) are both construction companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
Armstrong Flooring -3.69% 0.97% 0.62%
Armstrong World Industries 12.77% 41.95% 7.84%

Risk & Volatility

Armstrong Flooring has a beta of 2.27, meaning that its share price is 127% more volatile than the S&P 500. Comparatively, Armstrong World Industries has a beta of 1.68, meaning that its share price is 68% more volatile than the S&P 500.

Institutional and Insider Ownership

97.3% of Armstrong Flooring shares are owned by institutional investors. 2.2% of Armstrong Flooring shares are owned by company insiders. Comparatively, 0.6% of Armstrong World Industries shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Armstrong Flooring and Armstrong World Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Armstrong Flooring 0 4 1 0 2.20
Armstrong World Industries 1 6 4 0 2.27

Armstrong Flooring currently has a consensus target price of $24.20, indicating a potential upside of 77.55%. Armstrong World Industries has a consensus target price of $57.13, indicating a potential upside of 2.19%. Given Armstrong Flooring’s higher possible upside, equities analysts plainly believe Armstrong Flooring is more favorable than Armstrong World Industries.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Armstrong Flooring $1.13 billion 0.31 -$41.80 million $0.21 64.90
Armstrong World Industries $893.60 million 3.32 $154.80 million $3.02 18.51

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

Summary

Armstrong World Industries beats Armstrong Flooring on 8 of the 14 factors compared between the two stocks.

Armstrong Flooring Company Profile

Armstrong Flooring, Inc., together with its subsidiaries, designs, manufactures, sources, and sells flooring products in North America and the Pacific Rim. It operates through two segments, Resilient Flooring and Wood Flooring. The Resilient Flooring segment offers a range of floor coverings primarily for homes and commercial buildings under the Armstrong brand; and luxury vinyl tile products, vinyl tile flooring, vinyl sheet products, and laminate products, as well as installs and maintains materials and accessories. The Wood Flooring segment provides hardwood flooring products under the Armstrong and Bruce brand names for use in residential construction and renovation, as well as in commercial applications, including stores, restaurants, and offices. This segment offers pre-finished solid and engineered wood flooring products, as well as related accessories. The company sells its products to independent wholesale flooring distributors, large home centers, retailers, flooring contractors, and the manufactured homes industry, as well as through architects, designers, end users, and regional and national builders. Armstrong Flooring, Inc. was incorporated in 2015 and is headquartered in Lancaster, Pennsylvania.

Armstrong World Industries Company Profile

Armstrong World Industries, Inc. designs, manufactures, and sells ceiling systems primarily for use in the construction and renovation of residential and commercial buildings worldwide. It principally offers mineral fiber, fiberglass wool, and metal ceiling systems. The company produces suspended mineral fiber and soft fiber ceiling systems; suspension system (grid) and ceiling component products; and acoustical ceiling, wall, and structural solutions. It sells its commercial ceiling materials and accessories to resale distributors and ceiling system contractors; residential ceiling products to wholesalers and retailers, such as large home centers; and architectural specialties products to resale distributors and ceiling systems contractors. The company was incorporated in 1891 and is headquartered in Lancaster, Pennsylvania.

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