Analyzing Smith-Midland (SMID) & Forterra (FRTA)

Smith-Midland (OTCMKTS:SMID) and Forterra (NASDAQ:FRTA) are both small-cap construction companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, analyst recommendations, profitability, institutional ownership and risk.

Insider & Institutional Ownership

0.0% of Smith-Midland shares are owned by institutional investors. 19.1% of Smith-Midland shares are owned by company insiders. Comparatively, 0.8% of Forterra shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Smith-Midland 3.42% 6.31% 3.63%
Forterra 1.24% -37.94% -2.37%

Risk and Volatility

Smith-Midland has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, Forterra has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500.

Valuation and Earnings

This table compares Smith-Midland and Forterra’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Smith-Midland $41.72 million 0.91 $2.68 million N/A N/A
Forterra $1.58 billion 0.20 -$2.06 million ($0.79) -6.19

Smith-Midland has higher earnings, but lower revenue than Forterra.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Smith-Midland and Forterra, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Smith-Midland 0 0 0 0 N/A
Forterra 1 6 1 0 2.00

Forterra has a consensus price target of $10.81, suggesting a potential upside of 121.11%. Given Forterra’s higher probable upside, analysts clearly believe Forterra is more favorable than Smith-Midland.

Summary

Smith-Midland beats Forterra on 9 of the 12 factors compared between the two stocks.

Smith-Midland Company Profile

Smith-Midland Corporation, through its subsidiaries, invents, develops, manufactures, markets, leases, licenses, sells, and installs precast concrete products primarily for use in the construction, highway, utilities, and farming industries in the United States. The company offers Easi-Set SlenderWall lightweight construction panels, which are exterior cladding systems used for the exterior walls of buildings; and Easi-Set Sierra Wall that provides sound and sight barrier for use in highway projects, as well as residential, industrial, and commercial purposes. It also provides Easi-Set J-J Hooks highway safety barriers for use on roadways to separate lanes of traffic for construction work zone or traffic control purposes; and Easi-Set precast building and Easi-Span expandable precast buildings for use in communications operations, government applications, utilities installations, and commercial and industrial locations. In addition, it offers Easi-Set utility vaults for house equipment, such as cable, telephone, or traffic signal equipment, and for underground storage, as well as custom-built utility vaults for special needs; SoftSound soundwall panels to absorb highway noise; Beach Prisms erosion control modules for seawalls and jetties; and H2Out secondary drainage systems for panelized exterior cladding. Further, the company licenses its proprietary products and non-proprietary products in the United States, Canada, Belgium, New Zealand, Australia, Mexico, Trinidad, Spain, and Chile. It markets its products through in-house sales force, independent sales representatives, and direct mail to contractors performing public and private construction contracts, such as the construction of commercial buildings, public and private roads and highways, and airports; municipal utilities; and federal, state, and local transportation authorities. Smith-Midland Corporation was founded in 1960 and is based in Midland, Virginia.

Forterra Company Profile

Forterra, Inc. manufactures and sells water and drainage pipe and products in the United States and Eastern Canada. It also manufactures structural and specialty precast products, and precast concrete bridge girders; and pressure, prestressed concrete, and bar-wrapped concrete pipes. The company serves water-related infrastructure applications, including water transmission, distribution, and drainage; and contractors, distributors, municipalities, and utilities waterworks. Forterra, Inc. was founded in 2016 and is headquartered in Irving, Texas.

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