KBR (NYSE: KBR) and Quanta Services (NYSE:PWR) are both mid-cap construction companies, but which is the superior business? We will compare the two companies based on the strength of their profitabiliy, valuation, risk, dividends, earnings, analyst recommendations and institutional ownership.

Institutional and Insider Ownership

99.8% of KBR shares are owned by institutional investors. Comparatively, 89.0% of Quanta Services shares are owned by institutional investors. 0.6% of KBR shares are owned by insiders. Comparatively, 0.7% of Quanta Services shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for KBR and Quanta Services, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KBR 1 2 7 0 2.60
Quanta Services 0 2 6 0 2.75

KBR presently has a consensus target price of $18.50, indicating a potential upside of 18.97%. Quanta Services has a consensus target price of $40.00, indicating a potential upside of 22.14%. Given Quanta Services’ stronger consensus rating and higher possible upside, analysts clearly believe Quanta Services is more favorable than KBR.

Valuation & Earnings

This table compares KBR and Quanta Services’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
KBR $4.38 billion 0.51 $15.00 million ($0.47) -33.08
Quanta Services $8.12 billion 0.61 $580.47 million $1.47 22.28

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

Profitability

This table compares KBR and Quanta Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KBR -1.51% 4.79% 1.15%
Quanta Services 2.79% 7.08% 4.32%

Risk & Volatility

KBR has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, Quanta Services has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Dividends

KBR pays an annual dividend of $0.32 per share and has a dividend yield of 2.1%. Quanta Services does not pay a dividend. KBR pays out -68.1% of its earnings in the form of a dividend.

Summary

Quanta Services beats KBR on 10 of the 16 factors compared between the two stocks.

KBR Company Profile

KBR, Inc. is a provider of professional services and technologies across the asset and program life-cycle within the government services and hydrocarbons industries. The Company operates through business segments, including Technology & Consulting (T&C), Engineering & Construction (E&C), Government Services (GS), Non-strategic Business and Other. The T&C business segment combines KBR technologies, knowledge-based services and its three specialty consulting brands, Granherne, Energo and GVA, under a single customer-facing global business. The E&C business segment provides project and program delivery solution across the globe. The GS business segment provides life-cycle support solutions to defense, space, aviation and other programs and missions for government agencies in the United States, the United Kingdom and Australia. Its solutions include engineering services, mission and logistics support solutions, consulting, procurement, construction management and other support services.

Quanta Services Company Profile

Quanta Services, Inc. is a provider of specialty contracting services, offering infrastructure solutions primarily to the electric power and oil and gas industries in the United States, Canada and Australia and selected other international markets. The Company operates through two segments: Electric Power Infrastructure Services, which provides network solutions to customers in the electric power industry, and Oil and Gas Infrastructure Services, which provides network solutions to customers involved in the development and transportation of natural gas, oil and other pipeline products. The services it provides include the design, installation, upgrade, repair and maintenance of infrastructure within each of the industries it serves, such as electric power transmission and distribution networks, substation facilities, renewable energy facilities, pipeline transmission and distribution systems and facilities, and infrastructure services for the offshore and inland water energy markets.

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