Critical Contrast: Arcosa (NYSE:ACA) vs. Grafton Group (OTCMKTS:GROUF)

Arcosa (NYSE:ACA) and Grafton Group (OTCMKTS:GROUF) are both mid-cap construction companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Profitability

This table compares Arcosa and Grafton Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arcosa	7.23%	8.64%	4.41%
Grafton Group	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent recommendations and price targets for Arcosa and Grafton Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arcosa	0	2	2	1	2.80
Grafton Group	0	0	1	0	3.00

Arcosa presently has a consensus price target of $120.00, indicating a potential upside of 4.65%. Given Arcosa’s higher possible upside, equities analysts clearly believe Arcosa is more favorable than Grafton Group.

Insider & Institutional Ownership

90.7% of Arcosa shares are owned by institutional investors. Comparatively, 8.2% of Grafton Group shares are owned by institutional investors. 1.8% of Arcosa shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

Arcosa has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500. Comparatively, Grafton Group has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500.

Earnings & Valuation

This table compares Arcosa and Grafton Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arcosa	$2.88 billion	1.95	$208.40 million	$4.24	27.04
Grafton Group	$3.32 billion	0.73	$180.07 million	N/A	N/A

Arcosa has higher earnings, but lower revenue than Grafton Group.

Summary

Arcosa beats Grafton Group on 11 of the 13 factors compared between the two stocks.

About Arcosa

Arcosa, Inc., together with its subsidiaries, provides infrastructure-related products and solutions for the construction, engineered structures, and transportation markets in the United States. It operates through three segments: Construction Products, Engineered Structures, and Transportation Products. The Construction Products segment offers natural and recycled aggregates; specialty materials; and construction site support equipment, including trench shields and shoring products for residential and non-residential construction, and specialty/other products, as well as for infrastructure construction. The Engineered Structures segment offers utility structures, wind towers, traffic structures, and telecommunication structures for electricity transmission and distribution, wind power generation, highway road construction, and wireless communication markets. The Transportation Products segment offers inland barges, fiberglass barge covers, winches, marine hardware, and steel components for railcars and transportation equipment; cast components for industrial and mining sectors; and axles, circular forgings, and coupling devices for freight, tank, locomotive, and passenger rail transportation equipment, as well as other industrial uses. Arcosa, Inc. was incorporated in 2018 and is headquartered in Dallas, Texas.

About Grafton Group

Grafton Group plc engages in the distribution, retailing, and manufacturing businesses in Ireland, the Netherlands, Finland, and the United Kingdom. Its Distribution segment distributes building materials, paint, tools, ironmongery, fixings, and accessories, workwear and PPE, and spare parts; materials and plant for mechanical services, heating, plumbing, and air movement; and trade, DIY, and self-build markets with building materials, timber, doors and floors, plumbing and heating, bathrooms, and landscaping products under the Selco, Leyland SDM, Chadwicks, MacBlair, Isero, Polvo, Gunters en Meuser, TG Lynes, and IKH brands. The company’s Retailing segment retails home and garden products through stores, including DIY products, paints, lighting products, homestyle products, housewares, bathroom products, and kitchens, as well as gardening and Christmas products under the Woodie’s brand. Its Manufacturing segment manufactures dry mortars and wooden staircases; and drainage, ducting and roofline systems under the CPI Mortar, StairBox, and MFP brand names. Grafton Group plc was founded in 1902 and is based in Dublin, Ireland.