Sterling Construction (STRL) and Jacobs Engineering Group (JEC) Critical Analysis
Sterling Construction (NASDAQ: STRL) and Jacobs Engineering Group (NYSE:JEC) are both construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitabiliy, valuation, earnings, risk and institutional ownership.
Insider and Institutional Ownership
73.2% of Sterling Construction shares are held by institutional investors. Comparatively, 87.0% of Jacobs Engineering Group shares are held by institutional investors. 5.2% of Sterling Construction shares are held by insiders. Comparatively, 1.5% of Jacobs Engineering Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Risk & Volatility
Sterling Construction has a beta of 0.36, suggesting that its share price is 64% less volatile than the S&P 500. Comparatively, Jacobs Engineering Group has a beta of 1.53, suggesting that its share price is 53% more volatile than the S&P 500.
This is a breakdown of current ratings and target prices for Sterling Construction and Jacobs Engineering Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Jacobs Engineering Group||0||6||3||0||2.33|
Sterling Construction currently has a consensus target price of $13.50, indicating a potential upside of 0.97%. Jacobs Engineering Group has a consensus target price of $61.00, indicating a potential upside of 16.10%. Given Jacobs Engineering Group’s higher possible upside, analysts clearly believe Jacobs Engineering Group is more favorable than Sterling Construction.
Jacobs Engineering Group pays an annual dividend of $0.60 per share and has a dividend yield of 1.1%. Sterling Construction does not pay a dividend. Jacobs Engineering Group pays out 34.9% of its earnings in the form of a dividend.
This table compares Sterling Construction and Jacobs Engineering Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Jacobs Engineering Group||2.05%||8.56%||5.06%|
Valuation and Earnings
This table compares Sterling Construction and Jacobs Engineering Group’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Sterling Construction||$716.97 million||0.50||$16.74 million||($0.15)||-89.13|
|Jacobs Engineering Group||$10.19 billion||0.62||$630.50 million||$1.72||30.55|
Jacobs Engineering Group has higher revenue and earnings than Sterling Construction. Sterling Construction is trading at a lower price-to-earnings ratio than Jacobs Engineering Group, indicating that it is currently the more affordable of the two stocks.
Jacobs Engineering Group beats Sterling Construction on 12 of the 15 factors compared between the two stocks.
Sterling Construction Company Profile
Sterling Construction Company, Inc. is a heavy civil construction company engaged in the building and reconstruction of transportation and water infrastructure projects in Texas, Utah, Nevada, Arizona, California, Hawaii and other states. The Company’s transportation infrastructure projects include highways, roads, bridges, airfields, ports and light rail. Its water infrastructure projects include water, wastewater and storm drainage systems. The Company operates through heavy civil construction segment. The Company provides its services by using traditional general contracting arrangements, such as lump sum contracts and cost-plus contracts. The Company serves various markets in the United States, including Texas, Utah, Nevada, Arizona, California and Hawaii. The Company’s customers include departments of transportation in various states (DOTs), regional transit authorities, airport authorities, port authorities, water authorities and railroads.
Jacobs Engineering Group Company Profile
Jacobs Engineering Group Inc. is a technical professional services company. The Company provides a range of technical, professional and construction services to industrial, commercial and governmental clients. The Company’s services include Project Services; Process, Scientific, and Systems Consulting Services; Construction Services, and Operations and Maintenance Services. It operates four lines of business (LOBs): Petroleum and Chemicals; Buildings and Infrastructure; Aerospace and Technology, and Industrial. It caters its services to various sectors, such as oil and gas exploration, production and refining; chemicals and polymers; programs for various national governments, including aerospace, defense, and environmental programs; buildings; infrastructure and telecommunications; mining and minerals; pharmaceuticals and biotechnology; power; pulp and paper; technology and manufacturing, and food and consumer products.
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