Contrasting Comfort Systems USA (NYSE:FIX) & AAON (NASDAQ:AAON)

AAON (NASDAQ:AAON) and Comfort Systems USA (NYSE:FIX) are both construction companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Dividends

AAON pays an annual dividend of $0.40 per share and has a dividend yield of 0.5%. Comfort Systems USA pays an annual dividend of $2.00 per share and has a dividend yield of 0.3%. AAON pays out 27.2% of its earnings in the form of a dividend. Comfort Systems USA pays out 10.3% 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. AAON has raised its dividend for 2 consecutive years and Comfort Systems USA has raised its dividend for 13 consecutive years.

Insider and Institutional Ownership

70.8% of AAON shares are owned by institutional investors. Comparatively, 96.5% of Comfort Systems USA shares are owned by institutional investors. 18.7% of AAON shares are owned by company insiders. Comparatively, 1.6% of Comfort Systems USA shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares AAON and Comfort Systems USA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AAON	9.70%	15.45%	10.30%
Comfort Systems USA	9.01%	39.33%	14.76%

Analyst Ratings

This is a summary of recent ratings and recommmendations for AAON and Comfort Systems USA, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AAON	0	0	4	1	3.20
Comfort Systems USA	0	1	4	1	3.00

AAON currently has a consensus price target of $102.00, indicating a potential upside of 27.36%. Comfort Systems USA has a consensus price target of $635.60, indicating a potential downside of 6.63%. Given AAON’s stronger consensus rating and higher probable upside, analysts clearly believe AAON is more favorable than Comfort Systems USA.

Volatility & Risk

AAON has a beta of 0.94, meaning that its share price is 6% less volatile than the S&P 500. Comparatively, Comfort Systems USA has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500.

Valuation and Earnings

This table compares AAON and Comfort Systems USA”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AAON	$1.20 billion	5.44	$168.56 million	$1.47	54.48
Comfort Systems USA	$7.68 billion	3.13	$522.43 million	$19.46	34.98

Comfort Systems USA has higher revenue and earnings than AAON. Comfort Systems USA is trading at a lower price-to-earnings ratio than AAON, indicating that it is currently the more affordable of the two stocks.

Summary

Comfort Systems USA beats AAON on 9 of the 16 factors compared between the two stocks.

About AAON

AAON, Inc., together with its subsidiaries, engages in engineering, manufacturing, marketing, and selling air conditioning and heating equipment in the United States and Canada. The company operates through three segments: AAON Oklahoma, AAON Coil Products, and BASX. It offers rooftop units, data center cooling solutions, cleanroom systems, chillers, packaged outdoor mechanical rooms, air handling units, makeup air units, energy recovery units, condensing units, geothermal/water-source heat pumps, coils, and controls. The company markets and sells its products to retail, manufacturing, educational, lodging, supermarket, data centers, medical and pharmaceutical, and other commercial industries. It sells its products through a network of independent manufacturer representative organizations and internal sales force, as well as online. The company was incorporated in 1987 and is based in Tulsa, Oklahoma.

About Comfort Systems USA

Comfort Systems USA, Inc., together with its subsidiaries, provides mechanical and electrical installation, renovation, maintenance, repair, and replacement services for the mechanical and electrical services industry in the United States. It operates through two segments, Mechanical and Electrical. The company offers heating, ventilation, and air conditioning systems, as well as plumbing, electrical, piping and controls, off-site construction, monitoring, and fire protection. It also engages in the design, engineering, integration, installation, and start-up of mechanical, electrical, and plumbing (MEP) and related systems in new buildings; and renovation, expansion, maintenance, monitoring, repair, and replacement of MEP systems in existing buildings. In addition, the company provides remote monitoring of power usage, temperature, pressure, humidity and air flow for MEP and other building systems. It serves building owners and developers, general contractors, architects, consulting engineers, and property managers in the commercial, industrial, and institutional MEP markets. Comfort Systems USA, Inc. was founded in 1917 and is headquartered in Houston, Texas.