Comparing The Shaw Group (SHAW) and Fluor (FLR)

The Shaw Group (NYSE: SHAW) and Fluor (NYSE:FLR) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Dividends

Fluor pays an annual dividend of $0.84 per share and has a dividend yield of 1.6%. The Shaw Group does not pay a dividend. Fluor pays out 58.7% of its earnings in the form of a dividend.

Insider & Institutional Ownership

84.2% of Fluor shares are held by institutional investors. 1.3% of Fluor shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares The Shaw Group and Fluor’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The Shaw Group N/A N/A N/A $3.25 N/A
Fluor $19.04 billion 0.38 $281.40 million $1.43 36.12

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

Analyst Recommendations

This is a summary of current recommendations and price targets for The Shaw Group and Fluor, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Shaw Group 0 0 0 0 N/A
Fluor 0 7 4 0 2.36

Fluor has a consensus price target of $48.18, suggesting a potential downside of 6.71%.

Profitability

This table compares The Shaw Group and Fluor’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Shaw Group N/A N/A N/A
Fluor 1.03% 11.69% 4.24%

Summary

Fluor beats The Shaw Group on 8 of the 10 factors compared between the two stocks.

About The Shaw Group

The Shaw Group Inc. (Shaw) is a provider of technology, engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation and facilities management services to a diverse client base that includes multinational and national oil companies and industrial corporations, regulated utilities, independent and merchant power producers, and government agencies. The Company has developed and acquired intellectual property, including induction pipe bending technology and environmental decontamination technologies. Its segments include Power, Plant Services, Environmental & Infrastructure (E&I), Fabrication & Manufacturing (F&M), Energy & Chemicals (E&C) Segment, Investment in Westinghouse, and Corporate segment. Effective August 31, 2012, the Company completed the divestiture of its Energy & Chemicals business to Technip. On January 4, 2013, TOSHIBA CORP acquired a 20% stake in Westinghouse from Shaw Group Inc.

About Fluor

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.

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