Comfort Systems USA (NYSE: FIX) and Barnes Group (NYSE:B) are both construction companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitabiliy, earnings and valuation.

Valuation and Earnings

This table compares Comfort Systems USA and Barnes Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Comfort Systems USA $1.67 billion 0.74 $129.25 million $1.67 19.97
Barnes Group $1.34 billion 2.42 $305.46 million $2.86 21.06

Barnes Group has higher revenue, but lower earnings than Comfort Systems USA. Comfort Systems USA is trading at a lower price-to-earnings ratio than Barnes Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Comfort Systems USA and Barnes Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Comfort Systems USA 3.77% 16.52% 8.35%
Barnes Group 11.69% 13.02% 7.20%

Risk and Volatility

Comfort Systems USA has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500. Comparatively, Barnes Group has a beta of 1.43, meaning that its share price is 43% more volatile than the S&P 500.

Dividends

Comfort Systems USA pays an annual dividend of $0.30 per share and has a dividend yield of 0.9%. Barnes Group pays an annual dividend of $0.56 per share and has a dividend yield of 0.9%. Comfort Systems USA pays out 18.0% of its earnings in the form of a dividend. Barnes Group pays out 19.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Comfort Systems USA has increased its dividend for 4 consecutive years and Barnes Group has increased its dividend for 4 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Comfort Systems USA and Barnes Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Comfort Systems USA 0 2 3 0 2.60
Barnes Group 0 2 3 0 2.60

Comfort Systems USA currently has a consensus target price of $59.50, suggesting a potential upside of 78.41%. Barnes Group has a consensus target price of $57.50, suggesting a potential downside of 4.52%. Given Comfort Systems USA’s higher possible upside, analysts plainly believe Comfort Systems USA is more favorable than Barnes Group.

Insider and Institutional Ownership

94.1% of Comfort Systems USA shares are held by institutional investors. Comparatively, 85.5% of Barnes Group shares are held by institutional investors. 3.5% of Comfort Systems USA shares are held by company insiders. Comparatively, 8.5% of Barnes Group shares are held by company 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.

Summary

Barnes Group beats Comfort Systems USA on 8 of the 14 factors compared between the two stocks.

Comfort Systems USA Company Profile

Comfort Systems USA, Inc. is a provider of mechanical contracting services, which principally includes heating, ventilation and air conditioning (HVAC), plumbing, piping and controls, as well as off-site construction, electrical, monitoring and fire protection. As of December 31, 2016, the Company installed, maintained, repaired and replaced products and systems throughout its 35 operating units in 84 cities and 91 locations throughout the United States. The Company operates primarily in the commercial, industrial and institutional HVAC markets and offers services in the industrial, healthcare, education, office, technology, retail and government facilities. The Company provides a range of construction, renovation, expansion, maintenance, repair and replacement services for mechanical and related systems in commercial, industrial and institutional properties. The Company also provides remote monitoring of temperature, pressure, humidity and air flow for HVAC systems.

Barnes Group Company Profile

Barnes Group Inc. is an industrial and aerospace manufacturer and service provider, serving a range of end markets and customers. The Company’s engineered products, industrial technologies, and solutions are used in applications that provide transportation, manufacturing, healthcare products and technology to the world. Its segments include Industrial and Aerospace. The Industrial segment is engaged in the manufacturing of precision parts, products and systems for applications serving a customer base in end-markets, such as transportation, industrial equipment, consumer products, packaging, electronics, medical devices and energy. The Industrial segment includes the Molding Solutions, Nitrogen Gas Products and Engineered Components business units. The Aerospace segment includes the original equipment manufacturer (OEM) business and the aftermarket business, which includes maintenance repair and overhaul services and the manufacture and delivery of aerospace aftermarket spare parts.

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