Fluor Co. (NEW) (NYSE:FLR) and Jacobs Engineering (NYSE:J) are both construction companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, profitability, valuation, institutional ownership and risk.

Volatility and Risk

Fluor Co. (NEW) has a beta of 2.22, meaning that its share price is 122% more volatile than the S&P 500. Comparatively, Jacobs Engineering has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500.

Earnings & Valuation

This table compares Fluor Co. (NEW) and Jacobs Engineering’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fluor Co. (NEW) $19.17 billion 0.14 $224.83 million $2.15 9.00
Jacobs Engineering $12.74 billion 1.01 $847.98 million $5.05 19.16

Jacobs Engineering has lower revenue, but higher earnings than Fluor Co. (NEW). Fluor Co. (NEW) is trading at a lower price-to-earnings ratio than Jacobs Engineering, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Fluor Co. (NEW) and Jacobs Engineering’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fluor Co. (NEW) -7.66% 8.94% 2.67%
Jacobs Engineering 6.66% 11.42% 5.42%

Insider & Institutional Ownership

81.1% of Fluor Co. (NEW) shares are owned by institutional investors. Comparatively, 90.3% of Jacobs Engineering shares are owned by institutional investors. 1.4% of Fluor Co. (NEW) shares are owned by company insiders. Comparatively, 1.0% of Jacobs Engineering shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Fluor Co. (NEW) and Jacobs Engineering, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fluor Co. (NEW) 1 6 5 0 2.33
Jacobs Engineering 0 0 3 0 3.00

Fluor Co. (NEW) presently has a consensus target price of $27.50, indicating a potential upside of 42.05%. Jacobs Engineering has a consensus target price of $110.00, indicating a potential upside of 13.70%. Given Fluor Co. (NEW)’s higher possible upside, analysts plainly believe Fluor Co. (NEW) is more favorable than Jacobs Engineering.

Dividends

Fluor Co. (NEW) pays an annual dividend of $0.40 per share and has a dividend yield of 2.1%. Jacobs Engineering pays an annual dividend of $0.76 per share and has a dividend yield of 0.8%. Fluor Co. (NEW) pays out 18.6% of its earnings in the form of a dividend. Jacobs Engineering pays out 15.0% 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.

Summary

Jacobs Engineering beats Fluor Co. (NEW) on 10 of the 16 factors compared between the two stocks.

About Fluor Co. (NEW)

Fluor Corporation, through its subsidiaries, provides engineering, procurement, construction, fabrication and modularization, operation, maintenance and asset integrity, and project management services worldwide. It operates through four segments: Energy & Chemicals; Mining, Industrial, Infrastructure & Power; Diversified Services; and Government. The Energy & Chemicals segment offers a range of design, engineering, procurement, construction, fabrication, and project management services in the upstream, midstream, downstream, chemical, petrochemical, offshore and onshore oil and gas production, liquefied natural gas and pipeline markets. The Mining, Industrial, Infrastructure & Power segment provides design, engineering, procurement, construction, and project management services to the mining and metals, transportation, life sciences, advanced manufacturing, and power sectors. The Government segment offers engineering, construction, logistics, base and facilities operations and maintenance, contingency response, and environmental and nuclear services to the United States government, as well as governments internationally. It also provides engineering and construction services, logistics, and life-support services, as well as contingency operations support services to the defense sector. The Diversified Services segment provides asset services, asset integrity services, equipment solutions, and staffing services to the oil and gas, chemicals, life sciences, power, mining and metals, consumer products, and manufacturing industries; site and fleet management services; and technical, professional, and craft resources. The company also offers unionized management and construction services. Fluor Corporation was founded in 1912 and is headquartered in Irving, Texas.

About Jacobs Engineering

Jacobs Engineering Group, Inc. engages in the provision of a diverse range of technical, professional, and construction services to industrial, commercial, and governmental clients. Jacobs provides professional services through two lines of businesses: Critical Mission Solutions, and People and Places Solutions. Though the Critical Mission Solutions business, it provides cyber security, data analytics, software application development, enterprise and mission IT, systems integration and other technical consulting solutions to government agencies as well as selective aerospace, automotive and telecom customers. Its representative clients include national government departments/agencies in the US, Europe, United Kingdom, Australia, and Asia; state and local departments of transportation within the US; and private industry firms. The People and Places Solutions business provides end-to-end solutions for clients projects which includes connected mobility, water, smart cities, advanced manufacturing or the environment. Its clients include national, state and local government in the U.S., Europe, U.K., Middle East, Australia, New Zealand and Asia, as well as the private sector throughout the world. The company was founded by Joseph J. Jacobs in 1947 and is headquartered in Dallas, TX.

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