Contrasting Hitachi (HTHIY) and Sterling Construction (STRL)
Hitachi (OTCMKTS: HTHIY) and Sterling Construction (NASDAQ:STRL) are both multi-sector conglomerates companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, dividends, profitability, earnings and valuation.
Volatility and Risk
Hitachi has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500. Comparatively, Sterling Construction has a beta of 0.41, meaning that its stock price is 59% less volatile than the S&P 500.
This is a summary of recent ratings and target prices for Hitachi and Sterling Construction, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Sterling Construction has a consensus price target of $15.00, indicating a potential upside of 32.98%. Given Sterling Construction’s higher probable upside, analysts clearly believe Sterling Construction is more favorable than Hitachi.
Institutional and Insider Ownership
0.3% of Hitachi shares are owned by institutional investors. Comparatively, 74.8% of Sterling Construction shares are owned by institutional investors. 2.2% of Sterling Construction shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Hitachi pays an annual dividend of $0.51 per share and has a dividend yield of 0.7%. Sterling Construction does not pay a dividend. Hitachi pays out 11.6% of its earnings in the form of a dividend.
Earnings and Valuation
This table compares Hitachi and Sterling Construction’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Hitachi||$81.81 billion||0.43||$2.15 billion||$4.41||16.60|
|Sterling Construction||$957.96 million||0.32||$11.61 million||$0.55||20.51|
Hitachi has higher revenue and earnings than Sterling Construction. Hitachi is trading at a lower price-to-earnings ratio than Sterling Construction, indicating that it is currently the more affordable of the two stocks.
This table compares Hitachi and Sterling Construction’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Sterling Construction beats Hitachi on 8 of the 15 factors compared between the two stocks.
Hitachi, Ltd. provides information and telecommunication systems, social infrastructure and industrial systems, electronic systems and equipment, construction machinery, high functional materials and components, automotive systems, smart life and ecofriendly systems, other products, and financial services worldwide. The company's Information & Telecommunication Systems segment offers systems integration, consulting, and cloud services; and servers, storage products, software, telecommunications and network equipment, and ATMs. Its Social Infrastructure & Industrial Systems segment provides industrial machinery and plants, elevators, escalators, and railway systems; and thermal, nuclear, and renewable energy power generation systems, and transmission and distribution systems. The company's Electronic Systems & Equipment segment offers semiconductor processing equipment, test and measurement equipment, industrial products, medical electronics equipment, and power tools. Its Construction Machinery segment provides hydraulic excavators, wheel loaders, and mining machinery. The company's High Functional Materials & Components segment offers semiconductor and display related materials, circuit boards and materials, automotive parts, energy storage devices, specialty steels, magnetic materials and components, casting components and materials, and wires and cables. Its Automotive Systems segment provides engine management, electric power train, drive control, and car information systems. The company's Smart Life & Ecofriendly Systems segment offers air-conditioning equipment, room air conditioners, refrigerators, and washing machines. Its Others segment provides optical disk drives, property management, and others. The company's Financial Services segment offers leasing and loan guarantee services. Hitachi, Ltd. has collaboration with the University of Utah Health. The company was founded in 1910 and is headquartered in Tokyo, Japan.
About Sterling Construction
Sterling Construction Company, Inc., together with its subsidiaries, operates as a heavy civil and residential construction company in Arizona, California, Colorado, Hawaii, Nevada, Texas, Utah, and other states in the United States. The company's Heavy Civil Construction segment undertakes heavy civil construction projects, including highways, roads, bridges, airfields, ports, light rail, water, wastewater and storm drainage systems, foundations for multi-family homes, commercial concrete projects, and parking structures. This segment primarily serves the departments of transportation in various states, regional transit authorities, airport authorities, port authorities, water authorities, and railroads, as well as commercial construction customers. Its Residential Construction segment undertakes construction projects, such as concrete foundations for single-family homes. This segment serves home builders. The company was formerly known as Oakhurst Company, Inc. and changed its name to Sterling Construction Company, Inc. in November 2001. Sterling Construction Company, Inc. was founded in 1955 and is headquartered in The Woodlands, Texas.
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