Financial Review: Q.E.P. (QEPC) & Simpson Manufacturing (SSD)

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Q.E.P. (OTCMKTS:QEPC) and Simpson Manufacturing (NYSE:SSD) are both consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, analyst recommendations, valuation, dividends, risk and institutional ownership.

Insider & Institutional Ownership

6.1% of Q.E.P. shares are held by institutional investors. Comparatively, 89.7% of Simpson Manufacturing shares are held by institutional investors. 51.1% of Q.E.P. shares are held by insiders. Comparatively, 0.4% of Simpson Manufacturing shares are held by 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.

Dividends

Simpson Manufacturing pays an annual dividend of $0.88 per share and has a dividend yield of 1.5%. Q.E.P. does not pay a dividend. 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Q.E.P. 1.56% 0.97% 0.53%
Simpson Manufacturing 11.88% 14.43% 12.13%

Volatility & Risk

Q.E.P. has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Simpson Manufacturing has a beta of 1.73, indicating that its stock price is 73% more volatile than the S&P 500.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Q.E.P. $322.39 million 0.30 $7.94 million N/A N/A
Simpson Manufacturing $977.03 million 2.79 $92.61 million $1.98 29.76

Simpson Manufacturing has higher revenue and earnings than Q.E.P..

Analyst Recommendations

This is a summary of current ratings for Q.E.P. and Simpson Manufacturing, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Q.E.P. 0 0 0 0 N/A
Simpson Manufacturing 0 2 1 0 2.33

Simpson Manufacturing has a consensus target price of $71.33, suggesting a potential upside of 21.07%. Given Simpson Manufacturing’s higher probable upside, analysts clearly believe Simpson Manufacturing is more favorable than Q.E.P..

Summary

Simpson Manufacturing beats Q.E.P. on 12 of the 15 factors compared between the two stocks.

Q.E.P. Company Profile

Q.E.P. Co., Inc. manufactures, markets, and distributes a range of hardwood and laminate flooring, flooring installation tools, adhesives, and flooring related products for the professional installation and do-it-yourself markets. It operates in three segments: North America, Europe, and Australia/New Zealand. The company also provides industrial tools to the industrial trades. Its product portfolio includes tile saws, blades, and accessories; tile cutters and accessories; hand tools; tile spacers; scrapers; trowels and floats; mixers and paddles; drill bits, hole saws, and jigsaw blades; clean-up, repair, and maintenance products; knee pads and safety tools; installation kits; underlayment products; cement boards and masonry tools; and Brutus products. The company markets its products under the QEP, ROBERTS, HarrisWood, Fausfloor, Capitol, Nupla, HISCO, Ludell, Porta-Nails, Elastiment, Vitrex, Homelux, Tilerite, PRCI, Plasplugs, Tomecanic, and Benetiere brands. Q.E.P. Co., Inc. sells its products to home improvement retail centers, specialty distribution outlets, municipalities, and industrial solution providers. The company was founded in 1979 and is based in Boca Raton, Florida.

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.

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