IES (NASDAQ:IESC) versus Ameresco (NYSE:AMRC) Critical Analysis

Ameresco (NYSE:AMRC) and IES (NASDAQ:IESC) are both industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, valuation, profitability, risk, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares Ameresco and IES”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ameresco	$1.93 billion	0.53	$44.28 million	$0.52	37.28
IES	$3.99 billion	2.40	$303.06 million	$11.26	21.34

IES has higher revenue and earnings than Ameresco. IES is trading at a lower price-to-earnings ratio than Ameresco, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Ameresco and IES, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ameresco	2	5	6	1	2.43
IES	0	1	2	0	2.67

Ameresco currently has a consensus price target of $41.89, suggesting a potential upside of 116.06%. IES has a consensus price target of $334.50, suggesting a potential upside of 39.18%. Given Ameresco’s higher probable upside, equities research analysts clearly believe Ameresco is more favorable than IES.

Profitability

This table compares Ameresco and IES’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ameresco	1.40%	2.82%	0.72%
IES	11.40%	35.70%	19.68%

Institutional and Insider Ownership

99.2% of Ameresco shares are held by institutional investors. Comparatively, 86.6% of IES shares are held by institutional investors. 45.1% of Ameresco shares are held by insiders. Comparatively, 56.4% of IES shares are held by 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.

Volatility & Risk

Ameresco has a beta of 2.62, meaning that its share price is 162% more volatile than the S&P 500. Comparatively, IES has a beta of 1.77, meaning that its share price is 77% more volatile than the S&P 500.

Summary

IES beats Ameresco on 9 of the 15 factors compared between the two stocks.

About Ameresco

Ameresco, Inc., a clean technology integrator, provides a portfolio of energy efficiency and renewable energy supply solutions in the United States, Canada, Europe, and internationally. It operates through U.S. Regions, U.S. Federal, Canada, Europe, Alternative Fuels, and All Other segments. The company offers energy efficiency, infrastructure upgrades, energy security and resilience, asset sustainability, and renewable energy solutions for businesses and organizations. It designs, develops, engineers, and installs projects that reduce the energy, as well as operations and maintenance (O&M) costs of its customers' facilities; and projects primarily include various measures customized for the facility and designed to enhance the efficiency of building systems, such as heating, ventilation, cooling, and lighting systems. In addition, the company offers renewable energy solutions and services, such as the construction of small-scale plants that the company owns or develops for customers that produce electricity, gas, heat, or cooling from renewable sources of energy and O&M services; and electricity, processed renewable gas fuel, and heat or cooling produced from renewable sources of energy. Further, the company sells photovoltaic (PV) solar energy products and systems, as well as provides consulting, and enterprise energy management services; and operates wind farms. It serves the federal, state, local governments, healthcare and educational institutions, airports, public housing authorities and public universities, municipal utilities, and commercial and industrial customers. As of December 31, 2023, the company owned and operated 185 small-scale renewable energy plants and solar PV installations. Ameresco, Inc. was incorporated in 2000 and is headquartered in Framingham, Massachusetts.

About IES

IES Holdings, Inc. engages in the design and installation of integrated electrical and technology systems, and provides infrastructure products and services in the United States. The Communications segment designs, installs, and maintains network infrastructure within data centers for co-location and managed hosting customers; corporate, educational, financial, hospitality, and healthcare buildings; e-commerce distribution centers; and high-tech manufacturing facilities. This segment also provides design and installation services for audio/visual, telephone, fire, and wireless access and intrusion alarm systems; and engages in designing/building, servicing, and maintaining data network systems. The Residential segment offers electrical installations to single-family housing and multi-family apartments; and cable television installations to residential and light commercial applications, as well as installs residential solar power for new construction and existing residences. The Infrastructure Solutions segment maintains and repairs alternating and direct current electric motors and generators, and power generating and distribution equipment; manufactures custom-engineered metal enclosed bus duct solutions used in power distribution; manufactures custom commercial and industrial generator enclosures; manufactures, re-manufactures, and repairs industrial lifting magnets; and maintains and repairs railroad main and auxiliary generators, main alternators, and traction motors. The Commercial & Industrial segment offers electrical and mechanical design, construction, and maintenance services for office buildings, manufacturing facilities, data centers, chemical plants, refineries, wind farms, solar facilities, municipal infrastructures, and health care facilities. The company was formerly known as Integrated Electrical Services, Inc. and changed its name to IES Holdings, Inc. in May 2016. IES Holdings, Inc. was incorporated in 1997 and is headquartered in Houston, Texas.