AECOM (NYSE: ACM) and EMCOR Group (NYSE:EME) are both mid-cap construction companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, profitability, risk, earnings, analyst recommendations and valuation.

Volatility & Risk

AECOM has a beta of 1.7, meaning that its share price is 70% more volatile than the S&P 500. Comparatively, EMCOR Group has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500.

Profitability

This table compares AECOM and EMCOR Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AECOM 1.46% 12.19% 3.29%
EMCOR Group 2.63% 13.19% 5.32%

Dividends

EMCOR Group pays an annual dividend of $0.32 per share and has a dividend yield of 0.5%. AECOM does not pay a dividend. EMCOR Group pays out 9.6% of its earnings in the form of a dividend. EMCOR Group has raised its dividend for 5 consecutive years.

Insider and Institutional Ownership

82.1% of AECOM shares are held by institutional investors. Comparatively, 93.5% of EMCOR Group shares are held by institutional investors. 0.7% of AECOM shares are held by company insiders. Comparatively, 2.0% of EMCOR Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares AECOM and EMCOR Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AECOM $17.67 billion 0.30 $790.46 million $1.64 20.70
EMCOR Group $7.66 billion 0.53 $425.32 million $3.33 20.42

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for AECOM and EMCOR Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AECOM 0 5 4 0 2.44
EMCOR Group 0 3 1 0 2.25

AECOM presently has a consensus price target of $38.67, suggesting a potential upside of 13.93%. EMCOR Group has a consensus price target of $70.50, suggesting a potential upside of 3.68%. Given AECOM’s stronger consensus rating and higher possible upside, analysts plainly believe AECOM is more favorable than EMCOR Group.

Summary

EMCOR Group beats AECOM on 10 of the 17 factors compared between the two stocks.

AECOM Company Profile

AECOM is engaged in designing, building, financing and operating infrastructure assets for governments, businesses and organizations. The Company’s segments include design and consulting services (DCS), construction services (CS) and management services (MS). Its DCS segment is engaged in planning, consulting, architectural and engineering design services to commercial and government clients in major end markets, such as transportation, facilities, environmental, energy, water and government. Its CS segment is engaged in construction services, including building construction and energy, infrastructure and industrial construction, primarily in the Americas. Its MS segment is engaged in programming and facilitating management and maintenance, training, logistics, consulting, technical assistance, and systems integration and information technology services, primarily for agencies of the United States government and other national governments.

EMCOR Group Company Profile

EMCOR Group, Inc. is an electrical and mechanical construction, and facilities services firm in the United States. The Company provides building services and industrial services. Its segments are United States electrical construction and facilities services; United States mechanical construction and facilities services; United States building services; United States industrial services, and United Kingdom building services. As of December 31, 2016, its services were provided to a range of commercial, industrial, utility and institutional customers through approximately 75 operating subsidiaries and joint venture entities. It is providing construction services relating to electrical and mechanical systems in various types of non-residential and certain residential facilities, and in providing services relating to the operation, maintenance and management of facilities, including refineries and petrochemical plants. It operates various electrical and mechanical systems.

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