Primoris Services Corporation (NASDAQ: PRIM) and USD Partners (NYSE:USDP) are both small-cap construction companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.

Volatility & Risk

Primoris Services Corporation has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500. Comparatively, USD Partners has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Dividends

Primoris Services Corporation pays an annual dividend of $0.22 per share and has a dividend yield of 0.8%. USD Partners pays an annual dividend of $1.36 per share and has a dividend yield of 13.0%. Primoris Services Corporation pays out 23.4% of its earnings in the form of a dividend. USD Partners pays out 110.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a summary of recent ratings and price targets for Primoris Services Corporation and USD Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Primoris Services Corporation 0 5 2 0 2.29
USD Partners 1 1 1 0 2.00

Primoris Services Corporation currently has a consensus target price of $26.67, indicating a potential downside of 8.01%. USD Partners has a consensus target price of $17.00, indicating a potential upside of 61.90%. Given USD Partners’ higher probable upside, analysts clearly believe USD Partners is more favorable than Primoris Services Corporation.

Earnings & Valuation

This table compares Primoris Services Corporation and USD Partners’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Primoris Services Corporation $2.30 billion 0.65 $162.46 million $0.94 30.84
USD Partners $110.04 million 2.52 $55.88 million $1.23 8.54

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

Profitability

This table compares Primoris Services Corporation and USD Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Primoris Services Corporation 2.09% 11.30% 4.90%
USD Partners 21.37% 42.91% 7.72%

Insider & Institutional Ownership

69.7% of Primoris Services Corporation shares are held by institutional investors. Comparatively, 30.3% of USD Partners shares are held by institutional investors. 24.0% of Primoris Services Corporation shares are held 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.

Summary

Primoris Services Corporation beats USD Partners on 9 of the 16 factors compared between the two stocks.

About Primoris Services Corporation

Primoris Services Corporation is a holding company. The Company holds various subsidiaries, through which it operates as a specialty contractor and infrastructure company. The Company provides a range of construction, fabrication, maintenance, replacement, water and wastewater, and engineering services to public utilities, petrochemical companies, energy companies, municipalities, state departments of transportation and other customers. It operates in three segments: the West Construction Services segment (West segment), the East Construction Services segment (East segment) and the Energy segment. The Company installs, replaces, repairs and rehabilitates natural gas, refined product, water and wastewater pipeline systems; large diameter gas and liquid pipeline facilities, and heavy civil projects, earthwork and site development.

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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