Contrasting EMCOR Group (EME) and Fluor Corporation (FLR)

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

Analyst Ratings

This is a breakdown of current recommendations for EMCOR Group and Fluor Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EMCOR Group 0 3 1 0 2.25
Fluor Corporation 0 9 2 0 2.18

EMCOR Group currently has a consensus price target of $70.50, suggesting a potential upside of 5.82%. Fluor Corporation has a consensus price target of $48.40, suggesting a potential upside of 23.03%. Given Fluor Corporation’s higher possible upside, analysts clearly believe Fluor Corporation is more favorable than EMCOR Group.

Earnings and Valuation

This table compares EMCOR Group and Fluor Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
EMCOR Group $7.66 billion 0.51 $425.32 million $3.33 20.01
Fluor Corporation $19.31 billion 0.29 $562.31 million $0.79 49.80

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

Insider & Institutional Ownership

93.5% of EMCOR Group shares are held by institutional investors. Comparatively, 84.5% of Fluor Corporation shares are held by institutional investors. 2.0% of EMCOR Group shares are held by company insiders. Comparatively, 1.3% of Fluor Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

EMCOR Group pays an annual dividend of $0.32 per share and has a dividend yield of 0.5%. Fluor Corporation pays an annual dividend of $0.84 per share and has a dividend yield of 2.1%. EMCOR Group pays out 9.6% of its earnings in the form of a dividend. Fluor Corporation pays out 106.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EMCOR Group has raised its dividend for 5 consecutive years.

Profitability

This table compares EMCOR Group and Fluor Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EMCOR Group 2.63% 13.19% 5.32%
Fluor Corporation 0.58% 13.80% 4.92%

Risk and Volatility

EMCOR Group has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, Fluor Corporation has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500.

Summary

EMCOR Group beats Fluor Corporation on 10 of the 17 factors compared between the two stocks.

About EMCOR Group

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.

About Fluor Corporation

Fluor Corporation (Fluor) is a holding company. The Company operates its business in four segments: Energy, Chemicals & Mining; Industrial, Infrastructure & Power; Government, and Maintenance, Modification & Asset Integrity (MMAI). The Company, through its subsidiaries, offers professional services providing engineering, procurement, construction, fabrication and modularization, commissioning and maintenance, as well as project management services on a global basis. The Company is an integrated solutions provider for various industries, including oil and gas, chemicals and petrochemicals, mining and metals, transportation, power, life sciences and advanced manufacturing. It is also a service provider to the United States federal Government and governments abroad. It offers services in various categories, including engineering and design, procurement, construction, fabrication, maintenance, modification and asset integrity and project management.

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