NCI Building Systems (NYSE: NCS) and AECOM (NYSE:ACM) are both construction companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.

Profitability

This table compares NCI Building Systems and AECOM’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NCI Building Systems 3.18% 18.31% 5.31%
AECOM 1.46% 12.19% 3.29%

Institutional and Insider Ownership

93.0% of NCI Building Systems shares are owned by institutional investors. Comparatively, 82.1% of AECOM shares are owned by institutional investors. 1.8% of NCI Building Systems shares are owned by company insiders. Comparatively, 1.1% of AECOM shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares NCI Building Systems and AECOM’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
NCI Building Systems $1.76 billion 0.63 $147.14 million $0.79 19.87
AECOM $17.67 billion 0.31 $790.46 million $1.64 21.34

AECOM has higher revenue and earnings than NCI Building Systems. NCI Building Systems 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 recent ratings and target prices for NCI Building Systems and AECOM, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NCI Building Systems 0 0 3 0 3.00
AECOM 0 5 4 0 2.44

NCI Building Systems currently has a consensus target price of $17.33, indicating a potential upside of 10.40%. AECOM has a consensus target price of $38.89, indicating a potential upside of 11.11%. Given AECOM’s higher possible upside, analysts clearly believe AECOM is more favorable than NCI Building Systems.

Risk and Volatility

NCI Building Systems has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500. Comparatively, AECOM has a beta of 1.69, suggesting that its stock price is 69% more volatile than the S&P 500.

Summary

NCI Building Systems beats AECOM on 8 of the 14 factors compared between the two stocks.

About NCI Building Systems

NCI Building Systems, Inc. is a manufacturer and marketer of metal products in North America. The Company’s operating segments include Engineered building systems, Metal components and Metal coil coating. The Engineered building systems segment is engaged in the manufacturing of main frames and long bay systems, and engineering and drafting. The Metal components segment’s products include metal roof and wall panels, doors, metal partitions, metal trim, insulated metal panel (IMP) products and other related accessories. The Company manufactures and distributes a range of metal products for the non-residential construction market. It operates in the United States, Mexico, Canada and China. The Company provides metal coil coating services, and designs, engineers, manufactures and markets metal components and engineered building systems. It also provides metal coil coating services for commercial and construction applications, servicing both internal and external customers.

About AECOM

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.

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