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

Dividends

Arcosa pays an annual dividend of $0.20 per share and has a dividend yield of 0.4%. Valmont Industries pays an annual dividend of $1.80 per share and has a dividend yield of 1.4%. Arcosa pays out 8.5% of its earnings in the form of a dividend. Valmont Industries pays out 25.5% 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. Arcosa has increased its dividend for 1 consecutive years and Valmont Industries has increased its dividend for 1 consecutive years.

Analyst Recommendations

This is a breakdown of recent recommendations for Arcosa and Valmont Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Arcosa 0 1 3 0 2.75
Valmont Industries 0 1 1 0 2.50

Arcosa currently has a consensus price target of $53.00, indicating a potential upside of 19.05%. Valmont Industries has a consensus price target of $139.00, indicating a potential upside of 9.91%. Given Arcosa’s stronger consensus rating and higher probable upside, equities analysts plainly believe Arcosa is more favorable than Valmont Industries.

Volatility and Risk

Arcosa has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500. Comparatively, Valmont Industries has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500.

Valuation and Earnings

This table compares Arcosa and Valmont Industries’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Arcosa $1.74 billion 1.24 $113.30 million $2.35 18.94
Valmont Industries $2.77 billion 0.98 $153.77 million $7.06 17.91

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

Profitability

This table compares Arcosa and Valmont Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Arcosa 6.32% 6.86% 5.11%
Valmont Industries 5.17% 14.67% 6.03%

Insider & Institutional Ownership

85.7% of Valmont Industries shares are owned by institutional investors. 0.5% of Arcosa shares are owned by insiders. Comparatively, 3.0% of Valmont Industries shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Valmont Industries beats Arcosa on 10 of the 16 factors compared between the two stocks.

Arcosa Company Profile

Arcosa, Inc. manufactures and sells infrastructure-related products and services for the construction, energy, and transportation markets. It operates through three segments: Construction Products Group, Energy Equipment Group, and Transportation Products Group. The Construction Products Group segment offers lightweight and natural construction aggregates, and trench shields and shoring products that are used in construction landscape, including commercial, industrial, road and bridge, and underground construction. It serves concrete producers; commercial, residential, industrial, and highway contractors; manufacturers of masonry products; state and local governments; and equipment rental dealers. The Energy Equipment Group segment provides structural wind towers for wind turbine producers; steel utility structures for electricity transmission and distribution; and pressurized and non-pressurized storage and distribution containers that store and transport various products, such as propane, anhydrous ammonia, and natural gas liquids. The Transportation Products Group segment offers hopper barges, tank barges, fiberglass covers, hatches, castings, and winches for commercial marine transportation companies and industrial shippers; axles, circular forgings, and coupling devices for freight, tank, locomotive, and passenger rail transportation equipment, as well as for other industrial uses; and cast components for use in the industrial and mining sectors. The company is headquartered in Dallas, Texas.

Valmont Industries Company Profile

Valmont Industries, Inc. produces and sells fabricated metal products in the United States and internationally. The company operates through four segments: Engineered Support Structures, Utility Support Structures, Coatings, and Irrigation. The Engineered Support Structures segment manufactures and distributes engineered metal, steel, aluminum, and composite poles, towers, and components for lighting, traffic, and wireless communication markets; engineered access systems; integrated structure solutions for smart cities; and highway safety products. The Utility Support Structures segment manufactures engineered steel and concrete pole structures for the utility generation, transmission, and distribution applications; renewable energy generation equipment; and inspection services. The Coatings segment provides hot-dipped galvanizing, anodizing, powder coating, and e-coating services. The Irrigation segment manufactures agricultural irrigation equipment, and related parts and services under the Valley brand name for the agricultural industry; and tubular products for industrial customers. This segment also provides water management solutions for large-scale production agriculture; and technology for precision agriculture. The company serves municipalities and government entities, commercial lighting fixtures manufacturing companies, contractors, telecommunication and utility companies, and large farms, as well as the general manufacturing sector. Valmont Industries, Inc. was founded in 1946 and is headquartered in Omaha, Nebraska.

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