Reviewing Alfa Laval (OTCMKTS:ALFVY) and AECOM (NYSE:ACM)

AECOM (NYSE:ACM) and Alfa Laval (OTCMKTS:ALFVY) are both large-cap construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Earnings & Valuation

This table compares AECOM and Alfa Laval”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AECOM	$16.11 billion	0.93	$402.27 million	$4.59	24.65
Alfa Laval	$6.33 billion	2.82	$699.19 million	$1.75	24.67

Alfa Laval has lower revenue, but higher earnings than AECOM. AECOM is trading at a lower price-to-earnings ratio than Alfa Laval, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares AECOM and Alfa Laval’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AECOM	3.85%	27.67%	5.65%
Alfa Laval	11.26%	19.01%	8.94%

Analyst Recommendations

This is a summary of recent ratings for AECOM and Alfa Laval, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AECOM	0	0	7	0	3.00
Alfa Laval	0	2	0	0	2.00

AECOM presently has a consensus target price of $120.86, suggesting a potential upside of 6.80%. Given AECOM’s stronger consensus rating and higher probable upside, equities analysts clearly believe AECOM is more favorable than Alfa Laval.

Insider and Institutional Ownership

85.4% of AECOM shares are owned by institutional investors. Comparatively, 0.0% of Alfa Laval shares are owned by institutional investors. 0.4% of AECOM shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

AECOM has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, Alfa Laval has a beta of 1.34, suggesting that its stock price is 34% more volatile than the S&P 500.

Dividends

AECOM pays an annual dividend of $1.04 per share and has a dividend yield of 0.9%. Alfa Laval pays an annual dividend of $0.76 per share and has a dividend yield of 1.8%. AECOM pays out 22.7% of its earnings in the form of a dividend. Alfa Laval pays out 43.4% 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. AECOM has raised its dividend for 3 consecutive years.

Summary

AECOM beats Alfa Laval on 10 of the 17 factors compared between the two stocks.

About AECOM

AECOM, together with its subsidiaries, provides professional infrastructure consulting services worldwide. It operates in three segments: Americas, International, and AECOM Capital. The company offers planning, consulting, architectural and engineering design, construction and program management, and investment and development services to public and private clients. It is also involved in the investment and development of real estate projects. In addition, the company provides construction services, including building construction and energy, and infrastructure and industrial construction. It serves transportation, water, government, facilities, environmental, and energy sectors. The company was formerly known as AECOM Technology Corporation and changed its name to AECOM in January 2015. AECOM was incorporated in 1980 and is headquartered in Dallas, Texas.

About Alfa Laval

Alfa Laval Corporate AB provides heat transfer, separation, and fluid handling products and solutions worldwide. It operates in three divisions: Energy, Food & Water, and Marine. The company offers oil/gas-fired steam and composite steam boilers, exhaust gas economizer, and ballast water treatment systems, and exhaust gas cleaning products. It also provides sensing and control, cleaning validation, condition monitoring, agitators, tank, powder mixers, fittings, and tubes, as well as wall mounted cleaning nozzles, rotary jet and heads; and tank accessories and covers. In addition, the company offers centrifugal, rotary lobe, three screw, twin screw, and circumferential piston pumps. Further, it provides butterfly, control and check, double seal, diaphragm, double seat, regulating, safety, sampling, shutter, single seat, and ball valves. Additionally, the company offers heat exchanger, tube-in-tube heat exchangers, and process shell-and-tube heat exchangers. Furthermore, it provides finned tube air heat, scraped surface heat exchangers, and various plate heat exchangers, wet surface, and HYAC hybrid air coolers. The company also offers decanters and separator related products. It serves energy, utilities, home, personal care, food, dairy, beverage, marine, transportation, pharmaceutical, biotech, water, and wastewater industries. Alfa Laval Corporate AB was founded in 1883 and is headquartered in Lund, Sweden.