Head-To-Head Review: Emcor Group (EME) & The Shaw Group (SHAW)

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

Institutional & Insider Ownership

94.1% of Emcor Group shares are owned by institutional investors. 2.0% of Emcor Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Emcor Group pays an annual dividend of $0.32 per share and has a dividend yield of 0.4%. The Shaw Group does not pay a dividend. Emcor Group pays out 8.9% of its earnings in the form of a dividend. The Shaw Group has raised its dividend for 5 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Emcor Group 2.82% 13.94% 5.63%
The Shaw Group N/A N/A N/A

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Emcor Group $7.55 billion 0.64 $181.93 million $3.58 22.89
The Shaw Group N/A N/A N/A $3.25 N/A

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for Emcor Group and The Shaw Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Emcor Group 0 3 1 0 2.25
The Shaw Group 0 0 0 0 N/A

Emcor Group currently has a consensus price target of $80.50, suggesting a potential downside of 1.78%.

Summary

Emcor Group beats The Shaw Group on 9 of the 11 factors compared between the two stocks.

About Emcor Group

EMCOR Group, Inc. is an electrical and mechanical construction, and facilities services firm in the United States. The Company provides building services and industrial services. Its segments are United States electrical construction and facilities services; United States mechanical construction and facilities services; United States building services; United States industrial services, and United Kingdom building services. As of December 31, 2016, its services were provided to a range of commercial, industrial, utility and institutional customers through approximately 75 operating subsidiaries and joint venture entities. It is providing construction services relating to electrical and mechanical systems in various types of non-residential and certain residential facilities, and in providing services relating to the operation, maintenance and management of facilities, including refineries and petrochemical plants. It operates various electrical and mechanical systems.

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.

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