Analyzing Aecom (ACM) & Fluor (FLR)

Fluor (NYSE: FLR) and Aecom (NYSE:ACM) are both mid-cap construction companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations for Fluor and Aecom, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fluor 0 6 5 0 2.45
Aecom 1 4 4 0 2.33

Fluor presently has a consensus price target of $49.36, suggesting a potential downside of 13.50%. Aecom has a consensus price target of $35.11, suggesting a potential downside of 10.13%. Given Aecom’s higher probable upside, analysts plainly believe Aecom is more favorable than Fluor.

Dividends

Fluor pays an annual dividend of $0.84 per share and has a dividend yield of 1.5%. Aecom does not pay a dividend. Fluor pays out 58.7% of its earnings in the form of a dividend.

Insider and Institutional Ownership

84.1% of Fluor shares are owned by institutional investors. Comparatively, 82.4% of Aecom shares are owned by institutional investors. 1.3% of Fluor shares are owned by company insiders. Comparatively, 1.1% of Aecom shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Fluor has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500. Comparatively, Aecom has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500.

Valuation and Earnings

This table compares Fluor and Aecom’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fluor $19.04 billion 0.42 $281.40 million $1.43 39.91
Aecom $18.20 billion 0.34 $339.39 million $2.14 18.26

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

Profitability

This table compares Fluor and Aecom’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fluor 1.03% 11.69% 4.24%
Aecom 1.86% 12.12% 3.37%

Summary

Fluor beats Aecom on 9 of the 16 factors compared between the two stocks.

Fluor Company Profile

Fluor Corporation (Fluor) is a holding company. The Company operates its business in four segments: Energy, Chemicals & Mining; Industrial, Infrastructure & Power; Government, and Maintenance, Modification & Asset Integrity (MMAI). The Company, through its subsidiaries, offers professional services providing engineering, procurement, construction, fabrication and modularization, commissioning and maintenance, as well as project management services on a global basis. The Company is an integrated solutions provider for various industries, including oil and gas, chemicals and petrochemicals, mining and metals, transportation, power, life sciences and advanced manufacturing. It is also a service provider to the United States federal Government and governments abroad. It offers services in various categories, including engineering and design, procurement, construction, fabrication, maintenance, modification and asset integrity and project management.

Aecom Company Profile

AECOM is engaged in designing, building, financing and operating infrastructure assets for governments, businesses and organizations. The Company’s segments include design and consulting services (DCS), construction services (CS) and management services (MS). Its DCS segment is engaged in planning, consulting, architectural and engineering design services to commercial and government clients in major end markets, such as transportation, facilities, environmental, energy, water and government. Its CS segment is engaged in construction services, including building construction and energy, infrastructure and industrial construction, primarily in the Americas. Its MS segment is engaged in programming and facilitating management and maintenance, training, logistics, consulting, technical assistance, and systems integration and information technology services, primarily for agencies of the United States government and other national governments.

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