Contrasting Simpson Manufacturing (SSD) & Eastern (EML)

Simpson Manufacturing (NYSE:SSD) and Eastern (NASDAQ:EML) are both construction companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, valuation and earnings.

Profitability

This table compares Simpson Manufacturing and Eastern’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Simpson Manufacturing 11.88% 14.43% 12.13%
Eastern 4.30% 13.72% 7.01%

Risk & Volatility

Simpson Manufacturing has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500. Comparatively, Eastern has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.

Dividends

Simpson Manufacturing pays an annual dividend of $0.88 per share and has a dividend yield of 1.6%. Eastern pays an annual dividend of $0.44 per share and has a dividend yield of 1.6%. Simpson Manufacturing pays out 44.4% of its earnings in the form of a dividend. Simpson Manufacturing has raised its dividend for 4 consecutive years.

Institutional & Insider Ownership

88.7% of Simpson Manufacturing shares are owned by institutional investors. Comparatively, 65.4% of Eastern shares are owned by institutional investors. 0.4% of Simpson Manufacturing shares are owned by insiders. Comparatively, 13.7% of Eastern shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Simpson Manufacturing and Eastern’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Simpson Manufacturing $977.03 million 2.64 $92.61 million $1.98 28.29
Eastern $204.24 million 0.83 $5.04 million N/A N/A

Simpson Manufacturing has higher revenue and earnings than Eastern.

Analyst Ratings

This is a breakdown of current ratings and target prices for Simpson Manufacturing and Eastern, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Simpson Manufacturing 0 2 1 0 2.33
Eastern 0 0 0 0 N/A

Simpson Manufacturing presently has a consensus target price of $71.33, indicating a potential upside of 27.36%. Given Simpson Manufacturing’s higher possible upside, equities research analysts clearly believe Simpson Manufacturing is more favorable than Eastern.

Summary

Simpson Manufacturing beats Eastern on 12 of the 15 factors compared between the two stocks.

Simpson Manufacturing Company Profile

Simpson Manufacturing Co., Inc., through its subsidiaries, designs, engineers, manufactures, and sells building construction products. The company offers wood construction products, including connectors, truss plates, fastening systems, fasteners, and pre-fabricated lateral systems used in light-frame construction; and concrete construction products comprising adhesives, specialty chemicals, mechanical anchors, carbide drill bits, powder actuated tools, and fiber reinforced materials for use in concrete, masonry, and steel construction, as well as for concrete repair, protection, and strengthening applications. It also provides connectors for wood framing and cold formed steel applications; screws, tools, and products for deck, fascia, and drywall applications; mechanical anchors and epoxy adhesives; fiber reinforced cementitious mortar products; and decorative hardware and connectors for outdoor living spaces. The company markets its products to the residential construction, light industrial and commercial construction, remodeling, and do-it-yourself markets in the United States, Canada, France, the United Kingdom, Germany, Denmark, Switzerland, Portugal, Poland, the Netherlands, Belgium, Sweden, Norway, Australia, New Zealand, South Africa, China, Taiwan, and Vietnam, as well as in Mexico, Chile, and the Middle East. Simpson Manufacturing Co., Inc. was founded in 1956 and is headquartered in Pleasanton, California.

Eastern Company Profile

The Eastern Company designs, manufactures, and sells industrial hardware, security products, and metal products in the United States and internationally. The company's Industrial Hardware segment offers passenger restraint and vehicular locks, latches, hinges, mirrors, mirror-cameras, light-weight sleeper boxes, and truck bodies for tractor-trailer trucks, specialty commercial vehicles, recreational vehicles, fire and rescue vehicles, school buses, military vehicles, and other vehicles. This segment also provides fasteners and other closure devices. The company's Security Products segment offers e engineered and standard closing and locking systems, including vehicular accessory locks, cabinet locks, cam locks, electric switch locks, tubular key locks, and combination padlocks under the SESAMEE, PRESTOLOCK and SEARCHALERT names. Its products also include timers, drop meters, coin chutes, money boxes, meter cases, smart cards, value transfer stations, smart card readers, card management software, and access control units. In addition, this segment provides coin acceptors and other coin security products for the commercial laundry markets; and circuit boards and other electronic assemblies to various industries, including measurement systems, semiconductor equipment manufacturing, and industrial controls, medical, and military products. The company's Metal Products segment offers expansion shells to support the roofs of underground mines; and specialty malleable and ductile iron castings. This segment's products include mine roof support anchors, couplers for railroad braking systems, support anchoring for construction, and couplers/fittings for utility industries. The company sells its products to original equipment manufacturers, distributors, route operators, and locksmiths. The Eastern Company was founded in 1858 and is based in Naugatuck, Connecticut.

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