Comfort Systems USA (NYSE: FIX) and Milacron Holdings Corp. (NYSE:MCRN) are both small-cap construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitability, analyst recommendations and dividends.

Institutional & Insider Ownership

92.4% of Comfort Systems USA shares are held by institutional investors. Comparatively, 90.2% of Milacron Holdings Corp. shares are held by institutional investors. 3.5% of Comfort Systems USA shares are held by insiders. Comparatively, 3.4% of Milacron Holdings Corp. shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Comfort Systems USA and Milacron Holdings Corp., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Comfort Systems USA 0 2 2 0 2.50
Milacron Holdings Corp. 0 0 3 0 3.00

Comfort Systems USA currently has a consensus target price of $63.00, suggesting a potential upside of 42.21%. Milacron Holdings Corp. has a consensus target price of $21.67, suggesting a potential upside of 20.71%. Given Comfort Systems USA’s higher probable upside, equities analysts clearly believe Comfort Systems USA is more favorable than Milacron Holdings Corp..

Earnings and Valuation

This table compares Comfort Systems USA and Milacron Holdings Corp.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Comfort Systems USA $1.67 billion 0.99 $129.25 million $1.72 25.76
Milacron Holdings Corp. $1.18 billion 1.05 $188.00 million ($0.03) -598.13

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

Dividends

Comfort Systems USA pays an annual dividend of $0.30 per share and has a dividend yield of 0.7%. Milacron Holdings Corp. does not pay a dividend. Comfort Systems USA pays out 17.4% of its earnings in the form of a dividend. Milacron Holdings Corp. has raised its dividend for 4 consecutive years.

Profitability

This table compares Comfort Systems USA and Milacron Holdings Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Comfort Systems USA 3.76% 16.49% 8.14%
Milacron Holdings Corp. -0.09% -53.59% 6.84%

Volatility & Risk

Comfort Systems USA has a beta of 1.25, indicating that its share price is 25% more volatile than the S&P 500. Comparatively, Milacron Holdings Corp. has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Summary

Comfort Systems USA beats Milacron Holdings Corp. on 10 of the 16 factors compared between the two stocks.

About Comfort Systems USA

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.

About Milacron Holdings Corp.

Milacron Holdings Corp. is engaged in the manufacture, distribution, and service of engineered and customized systems used in the plastic technology and processing industry. The Company operates through three segments: Advanced Plastic Processing Technologies (APPT), Melt Delivery and Control Systems (MDCS), and Fluid Technologies. The Company has a product portfolio that includes hot runner systems, injection molding, blow molding and extrusion equipment. It produces process control systems, mold bases and components, and maintenance, repair and operating (MRO) supplies and fluid technology. As of December 31, 2016, the Company’s products were sold in over 100 countries across six continents. Its customers include original equipment manufacturers (OEMs), molders and mold-makers. Its customer base covers a range of end-market applications, including packaging, automotive, medical, construction, consumer goods and electronics.

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