Critical Review: Trex (NYSE:TREX) versus Carlisle Companies (NYSE:CSL)

Carlisle Companies (NYSE:CSL – Get Free Report) and Trex (NYSE:TREX – Get Free Report) are both industrials companies, but which is the better investment? We will compare the two businesses based on the strength of their valuation, profitability, risk, institutional ownership, analyst recommendations, earnings and dividends.

Institutional & Insider Ownership

89.5% of Carlisle Companies shares are held by institutional investors. Comparatively, 96.0% of Trex shares are held by institutional investors. 1.3% of Carlisle Companies shares are held by company insiders. Comparatively, 0.9% of Trex shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Carlisle Companies has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500. Comparatively, Trex has a beta of 1.47, suggesting that its share price is 47% more volatile than the S&P 500.

Profitability

This table compares Carlisle Companies and Trex’s net margins, return on equity and return on assets.

Analyst Recommendations

This is a summary of current ratings and price targets for Carlisle Companies and Trex, as provided by MarketBeat.com.

Carlisle Companies presently has a consensus price target of $402.43, indicating a potential upside of 22.37%. Trex has a consensus price target of $49.30, indicating a potential upside of 11.76%. Given Carlisle Companies’ stronger consensus rating and higher probable upside, research analysts plainly believe Carlisle Companies is more favorable than Trex.

Valuation and Earnings

This table compares Carlisle Companies and Trex”s top-line revenue, earnings per share and valuation.

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

Summary

Carlisle Companies beats Trex on 8 of the 14 factors compared between the two stocks.

About Carlisle Companies

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Carlisle Companies Incorporated operates as a manufacturer and supplier of building envelope products and solutions in the United States, Europe, North America, Asia and the Middle East, Africa, and internationally. It operates through two segments: Carlisle Construction Materials and Carlisle Weatherproofing Technologies. The company produces single-ply roofing products, and warranted roof systems and accessories, including ethylene propylene diene monomer, thermoplastic polyolefin and polyvinyl chloride membrane, polyiso insulation, and engineered metal roofing and wall panel systems for commercial and residential buildings. It also offers building envelope solutions, including high-performance waterproofing and moisture protection products, protective roofing underlayments, fully integrated liquid and sheet applied air/vapor barriers, sealants/primers and flashing systems, roof coatings and mastics, spray polyurethane foam and coating systems, block-molded expanded polystyrene insulation, and engineered products for HVAC applications. It sells its products under the Carlisle SynTec, Versico, WeatherBond, Hunter Panels, Resitrix, and Hertalan brands. Carlisle Companies Incorporated was founded in 1917 and is headquartered in Scottsdale, Arizona.

About Trex

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Trex Company, Inc. manufactures and distributes composite decking, railing, and outdoor living products and accessories for residential and commercial markets in the United States. It offers decking products and accessories under the names Trex Transcend, Trex Select, Trex Signature, Trex Transcend Lineage, and Trex Enhance for protection against fading, staining, mold, and scratching; Trex Hideaway, a hidden fastening system; and Trex DeckLighting, a LED dimmable deck lighting for use on posts, floors, and steps. The company also provides Trex Transcend Railing products that are used in Trex decking products and other decking materials; Trex Select Railing products for a simple clean finished look; Trex Enhance Railing system; Trex Signature aluminum railing for a contemporary look; and Trex Select T-Rail railing products. In addition, it offers Trex Seclusions, a fencing product that includes structural posts, bottom and top rails, pickets, and decorative post caps. Further, the company acts as a licensor in various licensing agreements with third parties to manufacture and sell products under the Trex name, including Trex Outdoor Furniture; Trex RainEscape, an above joist deck drainage system; Trex Pergola, a cellular PVC product; Trex Latticeworks outdoor lattice boards; Trex Cornhole boards; Diablo Trex Blade, a saw blade for wood-alternative composite decking; Trex SpiralStairs and structural steel posts; and Trex Outdoor Kitchens, cabinetry, and Storage products. It sells its products through wholesale distributors, retail lumber dealers, and Home Depot and Lowe’s stores. Trex Company, Inc. was founded in 1996 and is headquartered in Winchester, Virginia.