Knife River (NYSE:KNF) & Shimizu (OTCMKTS:SHMUY) Critical Analysis

Shimizu (OTCMKTS:SHMUY) and Knife River (NYSE:KNF) are both mid-cap construction companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, valuation and profitability.

Earnings and Valuation

This table compares Shimizu and Knife River”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shimizu	$12.77 billion	0.64	$435.70 million	$3.94	11.08
Knife River	$2.90 billion	1.45	$201.68 million	$2.61	28.39

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

Profitability

This table compares Shimizu and Knife River’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shimizu	5.05%	3.84%	1.40%
Knife River	4.87%	9.97%	4.41%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Shimizu and Knife River, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shimizu	0	0	0	0	0.00
Knife River	0	2	6	0	2.75

Knife River has a consensus price target of $96.33, indicating a potential upside of 30.03%. Given Knife River’s stronger consensus rating and higher possible upside, analysts plainly believe Knife River is more favorable than Shimizu.

Insider & Institutional Ownership

80.1% of Knife River shares are held by institutional investors. 0.3% of Knife River shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Shimizu has a beta of 0.32, suggesting that its share price is 68% less volatile than the S&P 500. Comparatively, Knife River has a beta of 0.43, suggesting that its share price is 57% less volatile than the S&P 500.

Summary

Knife River beats Shimizu on 10 of the 14 factors compared between the two stocks.

About Shimizu

Shimizu Corporation, together with its subsidiaries, engages in the construction, development, engineering, and life cycle valuation businesses in Japan and internationally. The company proposes, plans, designs, builds, repairs, manages, operates, and maintains offices, plants, schools, hospitals, and other buildings, such as nursing homes, rehabilitation centers, temples, shrines, and architectures; offers design, build, and renovation for tunnels, bridges, dams, urban infrastructure, energy facilities, and other public works; provides construction for manufacturing facilities, high-rise buildings, hospitals, bridges, subways, and other projects; and develops and rents real estate properties, including condominiums, data centers, office buildings, logistics facilities, and other properties. It also offers engineering, procurement, and construction services in solar and wind power projects, environmental clean-up engineering, turn-key order fulfillment of plants, and ICT systems and engineering projects. In addition, the company provides facility operation and management services; infrastructure management, maintenance, and concession services; and generates power using renewable energy and sells electricity, as well as involved in commercialization of smart cities and provision of services using ICT technology. Further, it engages in the lease and sale of construction equipment and materials; provision of interior finishing and rebar works; insurance agency, security, and travel agency services; supply of PCR test kits; and rental of various tower cranes, crawler cranes, and other construction machinery and equipment. Additionally, the company offers construction equipment consulting services, such as construction planning, maintenance, and management services; property and building management services; and real estate consulting and brokerage services, as well as tenant leasing services. Shimizu Corporation was founded in 1804 and is headquartered in Tokyo, Japan.

About Knife River

Knife River Corporation, together with its subsidiaries, provides aggregates- led construction materials and contracting services in the United States. It operates through Pacific, Northwest, Mountain, Central, and Energy Services segments. The company mines, processes, and sells construction aggregates, including crushed stone and sand, and gravel; and produces and sells asphalt and ready-mix concrete. It also provides contracting service, such as heavy-civil construction, asphalt and concrete paving, and site development and grading. In addition, the company sells cement, merchandise, and other building materials and related services. The company sells its construction materials to public and private-sector customers, including federal, state, and municipal governments, as well as industrial, commercial and residential developers, and other private parties; and provides its contracting services to public-sector customers for the development and servicing of highways, local roads, bridges, and other public-infrastructure projects. Knife River Corporation was founded in 1917 and is based in Bismarck, North Dakota.