Contrasting Aecom (ACM) and Fluor (FLR)

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

Dividends

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

Risk & Volatility

Aecom has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500. Comparatively, Fluor has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500.

Earnings & Valuation

This table compares Aecom and Fluor’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aecom $18.20 billion 0.33 $339.39 million $2.13 17.89
Fluor $19.04 billion 0.40 $281.40 million $1.43 37.63

Aecom has higher earnings, but lower revenue 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 Aecom and Fluor’s net margins, return on equity and return on assets.

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

Institutional & Insider Ownership

82.4% of Aecom shares are held by institutional investors. Comparatively, 84.2% of Fluor shares are held by institutional investors. 1.1% of Aecom shares are held by company insiders. Comparatively, 1.3% of Fluor shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Aecom and Fluor, as reported by MarketBeat.

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

Aecom currently has a consensus price target of $35.11, indicating a potential downside of 7.84%. Fluor has a consensus price target of $49.36, indicating a potential downside of 8.26%. Given Aecom’s higher probable upside, research analysts plainly believe Aecom is more favorable than Fluor.

Summary

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

About Aecom

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.

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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