EMCOR Group (EME) & KBR (KBR) Critical Analysis
EMCOR Group (NYSE: EME) and KBR (NYSE:KBR) are both mid-cap construction companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, risk, dividends and earnings.
This table compares EMCOR Group and KBR’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
EMCOR Group has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, KBR has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.
EMCOR Group pays an annual dividend of $0.32 per share and has a dividend yield of 0.5%. KBR pays an annual dividend of $0.32 per share and has a dividend yield of 1.8%. EMCOR Group pays out 9.6% of its earnings in the form of a dividend. KBR pays out -128.0% 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. KBR has increased its dividend for 5 consecutive years. KBR is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
93.4% of EMCOR Group shares are owned by institutional investors. Comparatively, 99.7% of KBR shares are owned by institutional investors. 2.0% of EMCOR Group shares are owned by insiders. Comparatively, 0.6% of KBR shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares EMCOR Group and KBR’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|EMCOR Group||$7.66 billion||0.53||$425.32 million||$3.33||20.63|
|KBR||$4.46 billion||0.56||$9.00 million||($0.25)||-71.36|
EMCOR Group has higher revenue and earnings than KBR. KBR is trading at a lower price-to-earnings ratio than EMCOR Group, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations for EMCOR Group and KBR, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
EMCOR Group currently has a consensus target price of $70.50, suggesting a potential upside of 2.62%. KBR has a consensus target price of $18.67, suggesting a potential upside of 4.63%. Given KBR’s stronger consensus rating and higher possible upside, analysts plainly believe KBR is more favorable than EMCOR Group.
KBR beats EMCOR Group on 10 of the 17 factors compared between the two stocks.
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.
KBR Company Profile
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.
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