Head-To-Head Comparison: EMCOR Group (EME) versus Quanta Services (PWR)

EMCOR Group (NYSE: EME) and Quanta Services (NYSE:PWR) are both mid-cap construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, risk, institutional ownership, dividends, earnings, analyst recommendations and profitability.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for EMCOR Group and Quanta Services, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EMCOR Group 0 2 1 0 2.33
Quanta Services 0 2 7 0 2.78

EMCOR Group presently has a consensus price target of $70.50, suggesting a potential upside of 12.48%. Quanta Services has a consensus price target of $42.00, suggesting a potential upside of 24.33%. Given Quanta Services’ stronger consensus rating and higher probable upside, analysts plainly believe Quanta Services is more favorable than EMCOR Group.

Profitability

This table compares EMCOR Group and Quanta Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
EMCOR Group 2.63% 13.19% 5.32%
Quanta Services 3.21% 8.36% 5.11%

Earnings & Valuation

This table compares EMCOR Group and Quanta Services’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
EMCOR Group $7.66 billion 0.48 $425.32 million $3.33 18.82
Quanta Services $8.52 billion 0.62 $655.04 million $1.77 19.08

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

Volatility & Risk

EMCOR Group has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, Quanta Services has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500.

Dividends

EMCOR Group pays an annual dividend of $0.32 per share and has a dividend yield of 0.5%. Quanta Services does not pay a dividend. EMCOR Group pays out 9.6% of its earnings in the form of a dividend. Quanta Services has raised its dividend for 5 consecutive years.

Insider & Institutional Ownership

93.6% of EMCOR Group shares are held by institutional investors. Comparatively, 89.0% of Quanta Services shares are held by institutional investors. 2.0% of EMCOR Group shares are held by company insiders. Comparatively, 0.7% of Quanta Services shares are held 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.

Summary

Quanta Services beats EMCOR Group on 10 of the 17 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 Quanta Services

Quanta Services, Inc. is a provider of specialty contracting services, offering infrastructure solutions primarily to the electric power and oil and gas industries in the United States, Canada and Australia and selected other international markets. The Company operates through two segments: Electric Power Infrastructure Services, which provides network solutions to customers in the electric power industry, and Oil and Gas Infrastructure Services, which provides network solutions to customers involved in the development and transportation of natural gas, oil and other pipeline products. The services it provides include the design, installation, upgrade, repair and maintenance of infrastructure within each of the industries it serves, such as electric power transmission and distribution networks, substation facilities, renewable energy facilities, pipeline transmission and distribution systems and facilities, and infrastructure services for the offshore and inland water energy markets.

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