IES (IESC) versus KBR (KBR) Critical Contrast

IES (NASDAQ: IESC) and KBR (NYSE:KBR) are both computer and technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Dividends

KBR pays an annual dividend of $0.32 per share and has a dividend yield of 2.0%. IES does not pay a dividend. KBR pays out 10.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings for IES and KBR, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IES 0 0 0 0 N/A
KBR 0 3 4 0 2.57

KBR has a consensus target price of $19.08, indicating a potential upside of 17.94%. Given KBR’s higher probable upside, analysts plainly believe KBR is more favorable than IES.

Volatility & Risk

IES has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500. Comparatively, KBR has a beta of 1.24, meaning that its stock price is 24% more volatile than the S&P 500.

Profitability

This table compares IES and KBR’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IES -2.46% 5.86% 3.26%
KBR 10.40% 22.65% 5.63%

Institutional and Insider Ownership

78.4% of IES shares are owned by institutional investors. Comparatively, 99.6% of KBR shares are owned by institutional investors. 60.0% of IES shares are owned by company insiders. Comparatively, 0.6% of KBR shares are owned 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.

Earnings & Valuation

This table compares IES and KBR’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IES $810.70 million 0.40 $13.42 million ($0.96) -15.78
KBR $4.17 billion 0.54 $434.00 million $3.06 5.29

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

Summary

KBR beats IES on 13 of the 15 factors compared between the two stocks.

About IES

IES Holdings, Inc., formerly Integrated Electrical Services, Inc., is a holding company that owns and manages diverse operating subsidiaries across a range of infrastructure-related end markets. The Company operates through four segments: Communications, Residential, Commercial & Industrial, and Infrastructure Solutions. The Communications segment provides network infrastructure services for data centers and other mission critical environments. The Residential segment provides electrical installation services for single-family housing and multi-family apartment complexes and cable television installations for residential and light commercial applications. The Commercial & Industrial segment provides electrical and mechanical design, construction, and maintenance services to the commercial and industrial markets. The Company’s Infrastructure Solutions segment provides electro-mechanical solutions for industrial operations to domestic and international customers.

About KBR

KBR, Inc. is a provider of professional services and technologies across the asset and program life-cycle within the government services and hydrocarbons industries. The Company operates through business segments, including Technology & Consulting (T&C), Engineering & Construction (E&C), Government Services (GS), Non-strategic Business and Other. The T&C business segment combines KBR technologies, knowledge-based services and its three specialty consulting brands, Granherne, Energo and GVA, under a single customer-facing global business. The E&C business segment provides project and program delivery solution across the globe. The GS business segment provides life-cycle support solutions to defense, space, aviation and other programs and missions for government agencies in the United States, the United Kingdom and Australia. Its solutions include engineering services, mission and logistics support solutions, consulting, procurement, construction management and other support services.

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