Comparing North American Construction Group (NYSE:NOA) & SunCoke Energy (NYSE:SXC)

North American Construction Group (NYSE:NOA) and SunCoke Energy (NYSE:SXC) are both small-cap materials companies, but which is the superior business? We will compare the two companies based on the strength of their risk, institutional ownership, earnings, profitability, dividends, valuation and analyst recommendations.

Dividends

North American Construction Group pays an annual dividend of $0.34 per share and has a dividend yield of 3.0%. SunCoke Energy pays an annual dividend of $0.48 per share and has a dividend yield of 4.6%. North American Construction Group pays out 43.0% of its earnings in the form of a dividend. SunCoke Energy pays out -75.0% 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. North American Construction Group has raised its dividend for 3 consecutive years and SunCoke Energy has raised its dividend for 4 consecutive years. SunCoke Energy is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares North American Construction Group and SunCoke Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
North American Construction Group	2.41%	6.23%	1.50%
SunCoke Energy	-2.88%	6.37%	2.28%

Institutional & Insider Ownership

75.0% of North American Construction Group shares are owned by institutional investors. Comparatively, 90.5% of SunCoke Energy shares are owned by institutional investors. 9.7% of North American Construction Group shares are owned by company insiders. Comparatively, 1.7% of SunCoke Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

North American Construction Group has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500. Comparatively, SunCoke Energy has a beta of 1.01, meaning that its stock price is 1% more volatile than the S&P 500.

Earnings & Valuation

This table compares North American Construction Group and SunCoke Energy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
North American Construction Group	$919.14 million	0.34	$24.22 million	$0.79	14.36
SunCoke Energy	$1.84 billion	0.48	-$44.20 million	($0.64)	-16.20

North American Construction Group has higher earnings, but lower revenue than SunCoke Energy. SunCoke Energy is trading at a lower price-to-earnings ratio than North American Construction Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for North American Construction Group and SunCoke Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
North American Construction Group	1	4	2	0	2.14
SunCoke Energy	0	2	0	0	2.00

North American Construction Group presently has a consensus target price of $25.75, suggesting a potential upside of 127.03%. SunCoke Energy has a consensus target price of $9.00, suggesting a potential downside of 13.21%. Given North American Construction Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe North American Construction Group is more favorable than SunCoke Energy.

Summary

North American Construction Group beats SunCoke Energy on 9 of the 17 factors compared between the two stocks.

About North American Construction Group

North American Construction Group Ltd. provides mining and heavy civil construction services to customers in the resource development and industrial construction sectors in Australia, Canada, and the United States. The company operates Heavy Equipment – Canada, Heavy Equipment – Australia, and Other segments. It also offers mine management services for thermal coal mines; and construction and operations support services in the Canadian oil sands region. In addition, the company provides fully maintained heavy equipment rentals and full service mine operations support at metallurgical and thermal coal mines; heavy equipment rentals to iron ore, gold and lithium producers; and heavy equipment maintenance, component remanufacturing, and full equipment rebuild services to mining companies and other heavy equipment operators, as well as supplies production-critical components to the mining and construction industry. As of December 31, 2023, it operated a heavy equipment fleet of 900 units. The company was formerly known as North American Energy Partners Inc. and changed its name to North American Construction Group Ltd. in April 2018. North American Construction Group Ltd. was incorporated in 1953 and is headquartered in Acheson, Canada.

About SunCoke Energy

SunCoke Energy, Inc. operates as an independent producer of coke in the Americas and Brazil. The company operates through three segments: Domestic Coke, Brazil Coke, and Logistics. It offers metallurgical and thermal coal. The company also provides handling and/or mixing services to steel, coke, electric utility, coal producing, and other manufacturing based customers. In addition, it owns and operates cokemaking facilities in the United States and Brazil. The company was founded in 1960 and is headquartered in Lisle, Illinois.