Chicago Bridge & Iron (NYSE: CBI) and William Lyon Homes (NYSE:WLH) are both small-cap construction companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, earnings, risk, dividends, analyst recommendations and profitability.
Chicago Bridge & Iron pays an annual dividend of $0.07 per share and has a dividend yield of 0.4%. William Lyon Homes does not pay a dividend. Chicago Bridge & Iron pays out -0.5% of its earnings in the form of a dividend.
63.7% of Chicago Bridge & Iron shares are held by institutional investors. Comparatively, 82.1% of William Lyon Homes shares are held by institutional investors. 1.1% of Chicago Bridge & Iron shares are held by company insiders. Comparatively, 21.3% of William Lyon Homes shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Chicago Bridge & Iron and William Lyon Homes’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Chicago Bridge & Iron||$6.67 billion||0.25||-$1.46 billion||($14.40)||-1.12|
|William Lyon Homes||$1.80 billion||0.59||$48.13 million||$1.23||22.12|
William Lyon Homes has lower revenue, but higher earnings than Chicago Bridge & Iron. Chicago Bridge & Iron is trading at a lower price-to-earnings ratio than William Lyon Homes, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations for Chicago Bridge & Iron and William Lyon Homes, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Chicago Bridge & Iron||1||9||3||0||2.15|
|William Lyon Homes||0||1||2||0||2.67|
Chicago Bridge & Iron currently has a consensus target price of $17.38, suggesting a potential upside of 7.51%. William Lyon Homes has a consensus target price of $33.00, suggesting a potential upside of 21.28%. Given William Lyon Homes’ stronger consensus rating and higher probable upside, analysts clearly believe William Lyon Homes is more favorable than Chicago Bridge & Iron.
This table compares Chicago Bridge & Iron and William Lyon Homes’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Chicago Bridge & Iron||-20.60%||-17.65%||-2.69%|
|William Lyon Homes||2.68%||10.51%||4.12%|
Volatility & Risk
Chicago Bridge & Iron has a beta of 2.45, meaning that its stock price is 145% more volatile than the S&P 500. Comparatively, William Lyon Homes has a beta of 1.64, meaning that its stock price is 64% more volatile than the S&P 500.
William Lyon Homes beats Chicago Bridge & Iron on 11 of the 16 factors compared between the two stocks.
Chicago Bridge & Iron Company Profile
Chicago Bridge & Iron Company N.V. provides services to customers in energy infrastructure market. The Company provides services, such as conceptual design, technology, engineering, procurement, fabrication, modularization, construction, commissioning, maintenance, program management and environmental services. Its Engineering and Construction segment provides engineering, procurement, and construction (EPC) services. Its Fabrication Services segment provides fabrication and erection of steel plate structures; fabrication of piping systems and process modules, and manufacturing and distribution of pipe and fittings. The Technology segment provides process technology licenses and associated engineering services, and catalysts, for petrochemical and refining industries, and offers process planning and project development services.
William Lyon Homes Company Profile
William Lyon Homes is primarily engaged in the design, construction and sale of single family detached and attached homes in California, Arizona and Nevada. The Company conducts its homebuilding operations through four reportable operating segments: Southern California, Northern California, Arizona and Nevada. For the three months ended March 31, 2012, 37% of home closings were derived from the Company’s California operations. The Company designs, constructs and sells a range of homes designed to meet the needs of each of its markets, although it primarily focuses sales to the entry-level and first time move-up home buyer markets. During the year ended December 31, 2011, the Company marketed its homes through 19 sales locations. In October 2013, the Company purchase 221 homesites at the master-planned Southshore community in Aurora, Colorado.
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