Critical Review: Energy Services of America (OTCMKTS:ESOA) & Larsen & Toubro (OTCMKTS:LTOUF)

Larsen & Toubro (OTCMKTS:LTOUF) and Energy Services of America (OTCMKTS:ESOA) are both industrials companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, profitability and earnings.

Profitability

This table compares Larsen & Toubro and Energy Services of America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Larsen & Toubro	N/A	N/A	N/A
Energy Services of America	N/A	N/A	N/A

Earnings and Valuation

This table compares Larsen & Toubro and Energy Services of America”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Larsen & Toubro	N/A	N/A	N/A	$58.73	0.82
Energy Services of America	$424.47 million	N/A	N/A	$0.18	84.64

Larsen & Toubro is trading at a lower price-to-earnings ratio than Energy Services of America, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current ratings and price targets for Larsen & Toubro and Energy Services of America, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Larsen & Toubro	0	0	1	0	3.00
Energy Services of America	0	0	0	0	0.00

Institutional & Insider Ownership

1.1% of Larsen & Toubro shares are owned by institutional investors. Comparatively, 2.1% of Energy Services of America shares are owned by institutional investors. 44.7% of Energy Services of America shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

Larsen & Toubro pays an annual dividend of $13.09 per share and has a dividend yield of 27.3%. Energy Services of America pays an annual dividend of $0.12 per share and has a dividend yield of 0.8%. Larsen & Toubro pays out 22.3% of its earnings in the form of a dividend. Energy Services of America pays out 65.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Larsen & Toubro is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Larsen & Toubro beats Energy Services of America on 5 of the 9 factors compared between the two stocks.

About Larsen & Toubro

Larsen & Toubro Limited engages in engineering, construction, and manufacturing operations worldwide. The Infrastructure segment engineers and constructs building and factories, transportation infrastructure, heavy civil infrastructure, power transmission and distribution, water and effluent treatment, and minerals, and metals. The Hydrocarbon segment provides front-end design, modular fabrication, procurement, project management, construction, installation, and commissioning for the oil and gas industry. The Power segment offers coal-based and gas-based thermal power plants, including power generation equipment with associated systems and balance-of-plant packages. The Heavy Engineering segment manufactures and supplies custom designed, engineered critical equipment and systems to the fertilizer, refinery, petrochemical, chemical, oil and gas, and thermal and nuclear power industries. The Defence Engineering segment designs, develops, produces, and supports equipment, systems, and platforms for the defense and aerospace sectors. This segment also designs, constructs, and repairs/refits defense vessels. The Others segment engages in the realty, smart world, and communication businesses, including military communications; marketing and servicing of construction and mining machinery and parts; and manufacturing and sale of rubber processing machinery. This segment also operates digital platforms, such as SuFin for B2B e-commerce; and EduTech offers engineering and technology related content. Larsen & Toubro Limited was founded in 1938 and is headquartered in Mumbai, India.

About Energy Services of America

Energy Services of America Corporation, together with its subsidiaries, provides contracting services for utilities and energy related companies in the United States. The company constructs, replaces, and repairs interstate and intrastate natural gas pipelines and storage facilities for utility companies and private natural gas companies; and provides services relating to pipeline, storage facilities, and plant works. It also offers electrical and mechanical installation, and repair services, including substation and switchyard, site preparation, equipment setting, pipe fabrication and installation, packaged buildings, transformers, and other ancillary works for the gas, petroleum power, chemical, water and sewer, and automotive industries. In addition, the company provides corrosion protection services, horizontal drilling services, liquid pipeline and pump station construction, production facility construction, water and sewer pipeline installation, and various maintenance and repair services, as well as other services related to pipeline construction. Further, it serves customers primarily in West Virginia, Virginia, Ohio, Pennsylvania, and Kentucky. Energy Services of America Corporation was incorporated in 2006 and is based in Huntington, West Virginia.