Critical Survey: VSE (NASDAQ:VSEC) and Fluor (NYSE:FLR)

Fluor (NYSE:FLR) and VSE (NASDAQ:VSEC) are both mid-cap construction companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, earnings, analyst recommendations, dividends and profitability.

Profitability

This table compares Fluor and VSE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Fluor	21.71%	8.32%	3.84%
VSE	1.23%	7.64%	4.52%

Insider & Institutional Ownership

88.1% of Fluor shares are held by institutional investors. Comparatively, 91.5% of VSE shares are held by institutional investors. 1.7% of Fluor shares are held by insiders. Comparatively, 2.3% of VSE 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.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Fluor and VSE, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Fluor	0	5	4	0	2.44
VSE	0	1	7	0	2.88

Fluor presently has a consensus target price of $49.57, suggesting a potential upside of 2.23%. VSE has a consensus target price of $224.71, suggesting a potential upside of 5.33%. Given VSE’s stronger consensus rating and higher probable upside, analysts plainly believe VSE is more favorable than Fluor.

Volatility and Risk

Fluor has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, VSE has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500.

Earnings & Valuation

This table compares Fluor and VSE”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Fluor	$16.32 billion	0.48	$2.15 billion	$19.66	2.47
VSE	$1.08 billion	4.55	$15.32 million	$0.68	313.74

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

Summary

VSE beats Fluor on 8 of the 14 factors compared between the two stocks.

About Fluor

Fluor Corporation provides engineering, procurement, and construction (EPC); fabrication and modularization; operation and maintenance; asset integrity; and project management services worldwide. The company operates through Energy Solutions, Urban Solutions, Mission Solutions, and Other segments. The Energy Solutions segment provides solutions to the energy transition markets, including asset decarbonization, carbon capture, renewable fuels, waste-to-energy, green chemicals, hydrogen, nuclear power, and other low-carbon energy sources. It also provides consulting services, including feasibility studies, process assessments, and project finance structuring; and a range of services for small modular reactor technologies, conventional and advanced nuclear reactor technologies. This segment serves the production and fuels, chemicals, LNG, power markets, chemicals and petrochemical industries. The Urban Solutions segment offers EPC and project management services to the infrastructure, advanced technologies, life sciences, and mining and metals industries. This segment also provides staffing services to the company and third-party clients with technical, professional, and craft resources on a contract or permanent placement basis. The Mission Solutions segment offers technical solutions to the U.S. and other governments. It also delivers solutions for nuclear security and operation, nuclear waste management, and laboratory management; and operation and maintenance, logistics, EPC, and life support solutions for mission-critical facilities across U.S. military service organizations. This segment offers site management, environmental remediation, and decommissioning for nuclear remediation at governmental facilities, as well as services to commercial nuclear clients. Fluor Corporation was founded in 1912 and is headquartered in Irving, Texas.

About VSE

VSE Corporation operates as a diversified aftermarket products and services company in the United States. The company operates through two segments, Aviation and Fleet. The Aviation segment provides aftermarket parts supply and distribution; maintenance, repair, and overhaul services for components and engine accessories supporting commercial, business, and general aviation operators. This segment serves commercial airlines, regional airlines, cargo transporters, MRO integrators and providers, aviation manufacturers, corporate and private aircraft owners, and fixed-base operators. The Fleet segment offers parts supply, inventory management, e-commerce fulfillment, logistics, supply chain support, and other services to support the commercial aftermarket medium- and heavy-duty truck market. This segment also provides sale of vehicle parts and supply chain services to support client truck fleets, as well as sustainment solutions and managed inventory services to government and commercial truck fleets. VSE Corporation was incorporated in 1959 and is headquartered in Alexandria, Virginia.