Analyzing Shimizu (OTCMKTS:SHMUY) & Simpson Manufacturing (NYSE:SSD)

Simpson Manufacturing (NYSE:SSD) and Shimizu (OTCMKTS:SHMUY) are both mid-cap construction companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Earnings and Valuation

This table compares Simpson Manufacturing and Shimizu”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Simpson Manufacturing	$2.23 billion	3.41	$322.22 million	$7.84	23.21
Shimizu	$12.77 billion	0.64	$435.70 million	$2.86	15.26

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

Profitability

This table compares Simpson Manufacturing and Shimizu’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Simpson Manufacturing	14.53%	17.72%	11.57%
Shimizu	3.74%	4.20%	1.56%

Dividends

Simpson Manufacturing pays an annual dividend of $1.16 per share and has a dividend yield of 0.6%. Shimizu pays an annual dividend of $0.76 per share and has a dividend yield of 1.7%. Simpson Manufacturing pays out 14.8% of its earnings in the form of a dividend. Shimizu pays out 26.6% 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. Simpson Manufacturing has increased its dividend for 11 consecutive years.

Volatility & Risk

Simpson Manufacturing has a beta of 1.26, suggesting that its share price is 26% more volatile than the S&P 500. Comparatively, Shimizu has a beta of 0.39, suggesting that its share price is 61% less volatile than the S&P 500.

Institutional and Insider Ownership

93.7% of Simpson Manufacturing shares are held by institutional investors. 0.4% of Simpson Manufacturing shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Simpson Manufacturing and Shimizu, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Simpson Manufacturing	0	1	1	0	2.50
Shimizu	0	0	0	0	0.00

Simpson Manufacturing presently has a consensus price target of $188.50, indicating a potential upside of 3.58%. Given Simpson Manufacturing’s stronger consensus rating and higher probable upside, equities analysts plainly believe Simpson Manufacturing is more favorable than Shimizu.

Summary

Simpson Manufacturing beats Shimizu on 14 of the 17 factors compared between the two stocks.

About Simpson Manufacturing

Simpson Manufacturing Co., Inc., through its subsidiaries, designs, engineers, manufactures, and sells structural solutions for wood, concrete, and steel connections. The company offers wood construction products, including connectors, truss plates, fastening systems, fasteners and shearwalls, and pre-fabricated lateral systems for use in light-frame construction; and concrete construction products comprising adhesives, specialty chemicals, mechanical anchors, carbide drill bits, powder actuated tools, fiber-reinforced materials, and other repair products for use in concrete, masonry, and steel construction, as well as grouts, coatings, sealers, mortars, fiberglass and fiber-reinforced polymer systems, and asphalt products for use in concrete construction repair, and strengthening and protection products. It also provides connectors and lateral products for wood framing, timber and offsite construction, structural steel construction, and cold-formed steel applications; and mechanical and adhesive anchors for concrete and masonry construction applications. In addition, the company offers engineering and design services, as well as software solutions that facilitate the specification, selection, and use of its products. It markets its products to the residential construction, light industrial and commercial construction, infrastructure construction, remodeling, and do-it-yourself markets in the United States, Canada, France, the United Kingdom, Germany, Denmark, Switzerland, Portugal, Poland, the Netherlands, Belgium, Spain, Italy, Romania, Sweden, Norway, Australia, New Zealand, China, Taiwan, and Vietnam. The company was founded in 1956 and is headquartered in Pleasanton, California.

About Shimizu

Shimizu Corporation, together with its subsidiaries, engages in the construction, development, engineering, and life cycle valuation businesses in Japan and internationally. The company proposes, plans, designs, builds, repairs, manages, operates, and maintains offices, plants, schools, hospitals, and other buildings, such as nursing homes, rehabilitation centers, temples, shrines, and architectures; offers design, build, and renovation for tunnels, bridges, dams, urban infrastructure, energy facilities, and other public works; provides construction for manufacturing facilities, high-rise buildings, hospitals, bridges, subways, and other projects; and develops and rents real estate properties, including condominiums, data centers, office buildings, logistics facilities, and other properties. It also offers engineering, procurement, and construction services in solar and wind power projects, environmental clean-up engineering, turn-key order fulfillment of plants, and ICT systems and engineering projects. In addition, the company provides facility operation and management services; infrastructure management, maintenance, and concession services; and generates power using renewable energy and sells electricity, as well as involved in commercialization of smart cities and provision of services using ICT technology. Further, it engages in the lease and sale of construction equipment and materials; provision of interior finishing and rebar works; insurance agency, security, and travel agency services; supply of PCR test kits; and rental of various tower cranes, crawler cranes, and other construction machinery and equipment. Additionally, the company offers construction equipment consulting services, such as construction planning, maintenance, and management services; property and building management services; and real estate consulting and brokerage services, as well as tenant leasing services. Shimizu Corporation was founded in 1804 and is headquartered in Tokyo, Japan.