Critical Analysis: AECOM (ACM) and Quanta Services (PWR)
AECOM (NYSE: ACM) and Quanta Services (NYSE:PWR) are both mid-cap construction companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.
Valuation and Earnings
This table compares AECOM and Quanta Services’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|AECOM||$17.67 billion||0.31||$790.46 million||$1.64||21.34|
|Quanta Services||$8.52 billion||0.67||$655.04 million||$1.77||20.89|
AECOM has higher revenue and earnings than Quanta Services. Quanta Services is trading at a lower price-to-earnings ratio than AECOM, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
AECOM has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500. Comparatively, Quanta Services has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500.
This table compares AECOM and Quanta Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
82.1% of AECOM shares are owned by institutional investors. Comparatively, 88.5% of Quanta Services shares are owned by institutional investors. 0.7% of AECOM shares are owned by company insiders. Comparatively, 0.7% of Quanta Services shares are owned by company 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.
This is a breakdown of current recommendations and price targets for AECOM and Quanta Services, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
AECOM currently has a consensus price target of $38.67, suggesting a potential upside of 10.48%. Quanta Services has a consensus price target of $42.00, suggesting a potential upside of 13.61%. Given Quanta Services’ stronger consensus rating and higher possible upside, analysts plainly believe Quanta Services is more favorable than AECOM.
Quanta Services beats AECOM on 9 of the 14 factors compared between the two stocks.
AECOM Company Profile
AECOM is engaged in designing, building, financing and operating infrastructure assets for governments, businesses and organizations. The Company’s segments include design and consulting services (DCS), construction services (CS) and management services (MS). Its DCS segment is engaged in planning, consulting, architectural and engineering design services to commercial and government clients in major end markets, such as transportation, facilities, environmental, energy, water and government. Its CS segment is engaged in construction services, including building construction and energy, infrastructure and industrial construction, primarily in the Americas. Its MS segment is engaged in programming and facilitating management and maintenance, training, logistics, consulting, technical assistance, and systems integration and information technology services, primarily for agencies of the United States government and other national governments.
Quanta Services Company Profile
Quanta Services, Inc. is a provider of specialty contracting services, offering infrastructure solutions primarily to the electric power and oil and gas industries in the United States, Canada and Australia and selected other international markets. The Company operates through two segments: Electric Power Infrastructure Services, which provides network solutions to customers in the electric power industry, and Oil and Gas Infrastructure Services, which provides network solutions to customers involved in the development and transportation of natural gas, oil and other pipeline products. The services it provides include the design, installation, upgrade, repair and maintenance of infrastructure within each of the industries it serves, such as electric power transmission and distribution networks, substation facilities, renewable energy facilities, pipeline transmission and distribution systems and facilities, and infrastructure services for the offshore and inland water energy markets.
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