Comparing Quanta Services (NYSE:PWR) and Babcock International Group (OTCMKTS:BCKIY)

Babcock International Group (OTCMKTS:BCKIY) and Quanta Services (NYSE:PWR) are both construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Institutional and Insider Ownership

90.5% of Quanta Services shares are held by institutional investors. 1.1% of Quanta Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Babcock International Group pays an annual dividend of $0.05 per share and has a dividend yield of 0.3%. Quanta Services pays an annual dividend of $0.44 per share and has a dividend yield of 0.1%. Quanta Services pays out 6.5% of its earnings in the form of a dividend. Quanta Services has raised its dividend for 6 consecutive years.

Analyst Ratings

This is a breakdown of current ratings and price targets for Babcock International Group and Quanta Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Babcock International Group	0	1	0	1	3.00
Quanta Services	0	7	16	0	2.70

Quanta Services has a consensus price target of $542.95, suggesting a potential downside of 1.12%. Given Quanta Services’ higher possible upside, analysts clearly believe Quanta Services is more favorable than Babcock International Group.

Valuation and Earnings

This table compares Babcock International Group and Quanta Services”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Babcock International Group	$6.16 billion	1.53	$315.25 million	N/A	N/A
Quanta Services	$28.48 billion	2.88	$1.03 billion	$6.80	80.75

Quanta Services has higher revenue and earnings than Babcock International Group.

Profitability

This table compares Babcock International Group and Quanta Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Babcock International Group	N/A	N/A	N/A
Quanta Services	3.61%	18.10%	6.84%

Risk & Volatility

Babcock International Group has a beta of 2.11, indicating that its stock price is 111% more volatile than the S&P 500. Comparatively, Quanta Services has a beta of 1.15, indicating that its stock price is 15% more volatile than the S&P 500.

Summary

Quanta Services beats Babcock International Group on 11 of the 16 factors compared between the two stocks.

About Babcock International Group

Babcock International Group PLC, together with its subsidiaries, provides value-add services for aerospace, defense, and security in the United Kingdom, rest of Europe, Africa, North America, Australasia, and internationally. The company operates through four segments: Marine, Nuclear, Land, and Aviation. It designs, procures, operates, and manages critical utility and process equipment; offers asset management, defense and maritime training, information and intelligence, equipment and system, and facilities and infrastructure services, as well as naval platforms; and designs, manufactures, and provides through-life support for mechanical and electrical systems and equipment. The company also offers naval architecture, engineering, and project management services; submarines and complex engineering services in support of various decommissioning programs and projects, training and operation support, new build program management, and design and installation; critical vehicle fleet management, and equipment support and training services for military and civil customers; and designs, assesses, manufactures, installs, maintains, and decommissions vehicles for police, fire and ambulance, civil service, military, and other security-focused organizations. In addition, it provides plain line track renewal services; and engineering services for track projects, signaling, telecommunications, and on-track plants. Further, the company offers critical engineering services to defense and civil customers, including pilot training, equipment support, and airbase management, as well as operates aviation fleets that provide delivering emergency services. The company was founded in 1891 and is headquartered in London, the United Kingdom.

About Quanta Services

Quanta Services, Inc. provides infrastructure solutions for the electric and gas utility, renewable energy, communications, and pipeline and energy industries in the United States, Canada, Australia, and internationally. The company’s Electric Power Infrastructure Solutions segment engages in the design, procurement, construction, upgrade, repair, and maintenance of electric power transmission and distribution infrastructure and substation facilities; installation, maintenance, and upgrade of electric power infrastructure projects; installation of smart grid technologies on electric power networks; and design, installation, maintenance, and repair of commercial and industrial wirings. This segment also offers aviation services; emergency restoration services; and other engineering and technical services; design and construction solutions to wireline and wireless communications, cable multi-system operators, and other customers; and training for electric workers, as well as training for the gas distribution and communications industries. The company’s Renewable Energy Infrastructure Solutions segment is involved in engineering, procurement, construction, repair, and maintenance of wind, solar, and hydropower generation facilities, as well as battery storage facilities; and provision of engineering and construction services for substations and switchyards, transmission, and other electrical infrastructures. The company’s Underground Utility and Infrastructure Solutions segment offers design, engineering, procurement, construction, upgrade, repair, and maintenance services for natural gas systems for gas utility customers; fabrication services for pipeline support systems and structures and facilities; and engineering and construction services for pipeline and storage systems, and compressor and pump stations. The company was formerly known as Fabal Construction, Inc. and changed its name to Quanta Services, Inc. in November 1997. The company was incorporated in 1997 and is headquartered in Houston, Texas.