Head-To-Head Review: Quanta Services (NYSE:PWR) versus VSE (NASDAQ:VSEC)

Quanta Services (NYSE:PWR) and VSE (NASDAQ:VSEC) are both construction companies, but which is the better business? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, analyst recommendations, institutional ownership and risk.

Volatility & Risk

Quanta Services has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500. Comparatively, VSE has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations for Quanta Services and VSE, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quanta Services	0	13	12	0	2.48
VSE	0	1	6	0	2.86

Quanta Services currently has a consensus price target of $438.64, suggesting a potential upside of 1.14%. VSE has a consensus price target of $197.17, suggesting a potential upside of 16.79%. Given VSE’s stronger consensus rating and higher probable upside, analysts clearly believe VSE is more favorable than Quanta Services.

Dividends

Quanta Services pays an annual dividend of $0.40 per share and has a dividend yield of 0.1%. VSE pays an annual dividend of $0.40 per share and has a dividend yield of 0.2%. Quanta Services pays out 5.9% of its earnings in the form of a dividend. VSE pays out 58.8% 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. Quanta Services has increased its dividend for 6 consecutive years.

Valuation & Earnings

This table compares Quanta Services and VSE”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Quanta Services	$27.19 billion	2.38	$904.82 million	$6.75	64.25
VSE	$1.33 billion	2.92	$15.32 million	$0.68	248.26

Quanta Services has higher revenue and earnings than VSE. Quanta Services is trading at a lower price-to-earnings ratio than VSE, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Quanta Services and VSE’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Quanta Services	3.73%	18.41%	7.15%
VSE	1.23%	7.64%	4.52%

Insider and Institutional Ownership

90.5% of Quanta Services shares are owned by institutional investors. Comparatively, 91.5% of VSE shares are owned by institutional investors. 1.1% of Quanta Services shares are owned by company insiders. Comparatively, 14.6% of VSE shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Quanta Services beats VSE on 9 of the 17 factors compared between the two stocks.

About Quanta Services

Quanta Services, Inc. provides infrastructure solutions for the electric and gas utility, renewable energy, communications, and pipeline and energy industries in the United States, Canada, Australia, and internationally. The company’s Electric Power Infrastructure Solutions segment engages in the design, procurement, construction, upgrade, repair, and maintenance of electric power transmission and distribution infrastructure and substation facilities; installation, maintenance, and upgrade of electric power infrastructure projects; installation of smart grid technologies on electric power networks; and design, installation, maintenance, and repair of commercial and industrial wirings. This segment also offers aviation services; emergency restoration services; and other engineering and technical services; design and construction solutions to wireline and wireless communications, cable multi-system operators, and other customers; and training for electric workers, as well as training for the gas distribution and communications industries. The company’s Renewable Energy Infrastructure Solutions segment is involved in engineering, procurement, construction, repair, and maintenance of wind, solar, and hydropower generation facilities, as well as battery storage facilities; and provision of engineering and construction services for substations and switchyards, transmission, and other electrical infrastructures. The company’s Underground Utility and Infrastructure Solutions segment offers design, engineering, procurement, construction, upgrade, repair, and maintenance services for natural gas systems for gas utility customers; fabrication services for pipeline support systems and structures and facilities; and engineering and construction services for pipeline and storage systems, and compressor and pump stations. The company was formerly known as Fabal Construction, Inc. and changed its name to Quanta Services, Inc. in November 1997. The company was incorporated in 1997 and is headquartered in Houston, Texas.

About VSE

VSE Corporation operates as a diversified aftermarket products and services company in the United States. The company operates through two segments, Aviation and Fleet. The Aviation segment provides aftermarket parts supply and distribution; maintenance, repair, and overhaul services for components and engine accessories supporting commercial, business, and general aviation operators. This segment serves commercial airlines, regional airlines, cargo transporters, MRO integrators and providers, aviation manufacturers, corporate and private aircraft owners, and fixed-base operators. The Fleet segment offers parts supply, inventory management, e-commerce fulfillment, logistics, supply chain support, and other services to support the commercial aftermarket medium- and heavy-duty truck market. This segment also provides sale of vehicle parts and supply chain services to support client truck fleets, as well as sustainment solutions and managed inventory services to government and commercial truck fleets. VSE Corporation was incorporated in 1959 and is headquartered in Alexandria, Virginia.