Head-To-Head Contrast: KBR (KBR) and USD Partners (USDP)

KBR (NYSE: KBR) and USD Partners (NYSE:USDP) are both construction companies, but which is the better business? We will compare the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, profitability, institutional ownership and valuation.

Dividends

KBR pays an annual dividend of $0.32 per share and has a dividend yield of 1.8%. USD Partners pays an annual dividend of $1.38 per share and has a dividend yield of 12.1%. KBR pays out 62.7% of its earnings in the form of a dividend. USD Partners pays out 150.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. KBR has raised its dividend for 2 consecutive years.

Profitability

This table compares KBR and USD Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KBR 1.63% 10.22% 2.14%
USD Partners 19.98% 35.73% 7.27%

Risk & Volatility

KBR has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500. Comparatively, USD Partners has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for KBR and USD Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KBR 0 2 5 0 2.71
USD Partners 0 2 1 0 2.33

KBR currently has a consensus price target of $21.33, indicating a potential upside of 18.52%. USD Partners has a consensus price target of $14.00, indicating a potential upside of 22.27%. Given USD Partners’ higher possible upside, analysts plainly believe USD Partners is more favorable than KBR.

Institutional and Insider Ownership

27.0% of USD Partners shares are owned by institutional investors. 0.6% of KBR shares are owned by company insiders. Comparatively, 2.6% of USD Partners shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares KBR and USD Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KBR $4.27 billion 0.59 -$61.00 million $0.51 35.29
USD Partners $111.13 million 2.72 $24.17 million $0.92 12.45

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

Summary

USD Partners beats KBR on 10 of the 17 factors compared between the two stocks.

About KBR

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.

About USD Partners

USD Partners LP acquires, develops and operates energy-related logistics assets, including rail terminals and other midstream infrastructure. The Company’s segments include Terminalling services and Fleet services. The Terminalling services segment consists of various operations, including Hardisty terminal, Casper terminal and Ethanol terminals. Its Hardisty terminal is an origination terminal where it loads various grades of Canadian crude oil onto railcars for transportation to end markets. The Casper terminal is a crude oil storage, blending and railcar loading terminal located in Casper, Wyoming. Its San Antonio and West Colton terminals are unit train-capable destination terminals that transload ethanol received by rail from producers onto trucks to meet local ethanol demand. The Company provides its customers with railcars and fleet services related to the transportation of liquid hydrocarbons and biofuels by rail under master fleet services agreements.

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