Head-To-Head Review: INNOVATE (NYSE:VATE) versus Granite Construction (NYSE:GVA)

Granite Construction (NYSE:GVA) and INNOVATE (NYSE:VATE) are both industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, dividends, risk and profitability.

Valuation and Earnings

This table compares Granite Construction and INNOVATE”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Granite Construction	$4.42 billion	1.08	$193.00 million	($4.31)	-25.42
INNOVATE	$1.25 billion	0.07	-$60.60 million	($1.87)	-3.23

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

Institutional and Insider Ownership

34.3% of INNOVATE shares are held by institutional investors. 0.9% of Granite Construction shares are held by company insiders. Comparatively, 57.7% of INNOVATE 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.

Analyst Recommendations

This is a breakdown of current recommendations for Granite Construction and INNOVATE, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Granite Construction	2	1	2	1	2.33
INNOVATE	1	0	0	0	1.00

Granite Construction currently has a consensus price target of $158.50, suggesting a potential upside of 44.67%. Given Granite Construction’s stronger consensus rating and higher probable upside, analysts clearly believe Granite Construction is more favorable than INNOVATE.

Profitability

This table compares Granite Construction and INNOVATE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Granite Construction	-3.32%	27.83%	7.17%
INNOVATE	-1.48%	N/A	-2.35%

Volatility & Risk

Granite Construction has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500. Comparatively, INNOVATE has a beta of 2.43, suggesting that its stock price is 143% more volatile than the S&P 500.

Summary

Granite Construction beats INNOVATE on 9 of the 15 factors compared between the two stocks.

About Granite Construction

Granite Construction Incorporated operates as an infrastructure contractor in the United States. It operates through two segments: Construction and Materials segments. The Construction segment engages in the construction and rehabilitation of roads, pavement preservation, bridges, rail lines, airports, marine ports, dams, reservoirs, aqueducts, infrastructure, and site development for use by the public and water-related construction for municipal agencies, commercial water suppliers, industrial facilities, and energy companies; and construction of various complex projects, including infrastructure/site development, mining, public safety, tunnel, solar storage, and power related projects. The Materials segment is involved in the production of aggregates, asphalt concrete, liquid asphalt, and recycled materials production for internal use in our construction projects and sale to third parties. It also offers site preparation, mining, and infrastructure services for residential development, energy development, commercial and industrial sites, railways, residential development, and energy development; and provides construction management professional services. It serves federal agencies, state departments of transportation, local transit authorities, county and city public works departments, school districts and developers, utilities, contractors, landscapers, manufacturers of products requiring aggregate materials, retailers, homeowners, farmers, brokers, and private owners of industrial, commercial, and residential sites. Granite Construction Incorporated was incorporated in 1922 and is headquartered in Watsonville, California.

About INNOVATE

INNOVATE Corp., through its subsidiaries, operates in infrastructure, life sciences, and spectrum areas in the United States. The Infrastructure segment provides industrial construction, structural steel, and facility maintenance services, such as fabrication and erection of structural steel and heavy steel plate services, and large-diameter water pipes and water storage tanks; fabrication of trusses and girders; and 3-D building information modeling and detailing for commercial, industrial, and infrastructure construction projects, such as buildings and office complexes, hotels and casinos, convention centers, sports arenas and stadiums, shopping malls, hospitals, dams, bridges, mines, metal processing, refineries, pulp and paper mills, and power plants. This segment also offers solutions for digital engineering, modeling and detailing, construction, and heavy equipment installation and facility services including maintenance, repair, and installation; and manufactures pollution control scrubbers, tunnel liners, pressure vessels, strainers, filters, separators, and customized products. The Life Sciences segment develops products to treat early osteoarthritis of the knee; and aesthetic and medical technologies for the skin. The Spectrum segment operates over-the-air broadcasting stations across the United States; and Azteca America, a Spanish-language broadcast network. The company was formerly known as HC2 Holdings, Inc. and changed its name to INNOVATE Corp. in September 2021. The company was incorporated in 1994 and is headquartered in New York, New York.