Comfort Systems USA (NYSE: FIX) and EMCOR Group (NYSE:EME) are both construction companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, profitabiliy, dividends, institutional ownership, risk and earnings.
Volatility & Risk
Comfort Systems USA has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, EMCOR Group has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.
This table compares Comfort Systems USA and EMCOR Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Comfort Systems USA||3.84%||16.94%||8.80%|
Institutional and Insider Ownership
94.5% of Comfort Systems USA shares are held by institutional investors. Comparatively, 94.0% of EMCOR Group shares are held by institutional investors. 3.5% of Comfort Systems USA shares are held by company insiders. Comparatively, 2.4% of EMCOR Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Comfort Systems USA and EMCOR Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Comfort Systems USA||$1.63 billion||0.82||$124.65 million||$1.66||21.51|
|EMCOR Group||$7.70 billion||0.51||$427.12 million||$3.28||20.11|
EMCOR Group has higher revenue and earnings than Comfort Systems USA. EMCOR Group is trading at a lower price-to-earnings ratio than Comfort Systems USA, indicating that it is currently the more affordable of the two stocks.
Comfort Systems USA pays an annual dividend of $0.30 per share and has a dividend yield of 0.8%. EMCOR Group pays an annual dividend of $0.32 per share and has a dividend yield of 0.5%. Comfort Systems USA pays out 18.1% of its earnings in the form of a dividend. EMCOR Group pays out 9.8% 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. Comfort Systems USA has raised its dividend for 5 consecutive years and EMCOR Group has raised its dividend for 4 consecutive years. Comfort Systems USA is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This is a summary of current recommendations and price targets for Comfort Systems USA and EMCOR Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Comfort Systems USA||0||2||3||0||2.60|
Comfort Systems USA presently has a consensus target price of $59.50, suggesting a potential upside of 66.67%. EMCOR Group has a consensus target price of $67.67, suggesting a potential upside of 2.60%. Given Comfort Systems USA’s stronger consensus rating and higher probable upside, research analysts clearly believe Comfort Systems USA is more favorable than EMCOR Group.
Comfort Systems USA beats EMCOR Group on 13 of the 17 factors compared between the two stocks.
Comfort Systems USA Company Profile
Comfort Systems USA, Inc. is a provider of mechanical contracting services, which principally includes heating, ventilation and air conditioning (HVAC), plumbing, piping and controls, as well as off-site construction, electrical, monitoring and fire protection. As of December 31, 2016, the Company installed, maintained, repaired and replaced products and systems throughout its 35 operating units in 84 cities and 91 locations throughout the United States. The Company operates primarily in the commercial, industrial and institutional HVAC markets and offers services in the industrial, healthcare, education, office, technology, retail and government facilities. The Company provides a range of construction, renovation, expansion, maintenance, repair and replacement services for mechanical and related systems in commercial, industrial and institutional properties. The Company also provides remote monitoring of temperature, pressure, humidity and air flow for HVAC systems.
EMCOR Group Company Profile
EMCOR Group, Inc. is an electrical and mechanical construction, and facilities services firm in the United States. The Company provides building services and industrial services. Its segments are United States electrical construction and facilities services; United States mechanical construction and facilities services; United States building services; United States industrial services, and United Kingdom building services. As of December 31, 2016, its services were provided to a range of commercial, industrial, utility and institutional customers through approximately 75 operating subsidiaries and joint venture entities. It is providing construction services relating to electrical and mechanical systems in various types of non-residential and certain residential facilities, and in providing services relating to the operation, maintenance and management of facilities, including refineries and petrochemical plants. It operates various electrical and mechanical systems.
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