Critical Review: Aecon Group (OTCMKTS:AEGXF) and Técnicas Reunidas (OTCMKTS:TNISF)

Técnicas Reunidas (OTCMKTS:TNISF) and Aecon Group (OTCMKTS:AEGXF) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, valuation, earnings, institutional ownership, analyst recommendations, risk and profitability.

Institutional & Insider Ownership

30.7% of Técnicas Reunidas shares are held by institutional investors. Comparatively, 45.8% of Aecon Group shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Técnicas Reunidas and Aecon Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Técnicas Reunidas	0	0	0	0	0.00
Aecon Group	0	0	2	0	3.00

Aecon Group has a consensus price target of $23.00, indicating a potential upside of 60.95%. Given Aecon Group’s stronger consensus rating and higher possible upside, analysts plainly believe Aecon Group is more favorable than Técnicas Reunidas.

Valuation and Earnings

This table compares Técnicas Reunidas and Aecon Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Técnicas Reunidas	N/A	N/A	N/A	$2.3391	10.26
Aecon Group	N/A	N/A	N/A	$0.3654	39.11

Técnicas Reunidas is trading at a lower price-to-earnings ratio than Aecon Group, indicating that it is currently the more affordable of the two stocks.

Dividends

Técnicas Reunidas pays an annual dividend of $1.1025 per share and has a dividend yield of 4.6%. Aecon Group pays an annual dividend of $0.35 per share and has a dividend yield of 2.4%. Técnicas Reunidas pays out 47.1% of its earnings in the form of a dividend. Aecon Group pays out 95.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Técnicas Reunidas is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares Técnicas Reunidas and Aecon Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Técnicas Reunidas	N/A	N/A	N/A
Aecon Group	N/A	N/A	N/A

Summary

Aecon Group beats Técnicas Reunidas on 5 of the 8 factors compared between the two stocks.

About Técnicas Reunidas

Técnicas Reunidas, S.A., an engineering and construction company, designs and manages industrial plant projects worldwide. It operates through Oil and Gas, Power, and Other Industries segments. The Oil and Gas segment offers engineering, procurement, and construction services in oil processing operations, and chemical production and processing operations; services related to the natural gas production and extraction value chain, such as production, processing, storage, and transportation; constructs, revamps, and expands refining plants; designs and builds auxiliary services and other refining units; and designs and constructs monomers, polymers and plastics, chemical, and fertilizer producing and processing plants. The Power segment provides consulting, engineering, procurement, and construction services for a range of electricity generating plants comprising conventional thermal plants, combined cycle power plants, gasification integrated plants with combined cycle, nuclear plants, co-generators, solar plants, fuel cells, solid waste plants, and biomass technology plants, as well as plant operation and maintenance services; and supplies turnkey plants. The Other Industries segment undertakes projects in various areas that include airports, industrial facilities, and desalination and water treatment plants, as well as projects for public authorities and other organizations, including management of car parks and sports centers. Técnicas Reunidas, S.A. is also involved in the real estate development, commercial development, and machinery wholesale business; and technical assistance, construction supervision, project management, technical management, and start-up and training activities. The company was formerly known as Lummus Española, S.A. and changed its name to Técnicas Reunidas, S.A. in 1972. Técnicas Reunidas, S.A. was incorporated in 1960 and is based in Madrid, Spain.

About Aecon Group

Aecon Group Inc., together with its subsidiaries, provide construction and infrastructure development services to private and public sector clients in Canada, the United States, and internationally. It operates through two segments, Construction and Concessions. The Construction segment focuses on civil infrastructure, urban transportation solutions, nuclear power infrastructure, utility infrastructure, and conventional industrial infrastructure market sectors. The Concessions segment engages in the development, building, financing, and operation of construction projects by way of public-private partnership contract structures. This segment also provides development of domestic international public-private partnership; private finance solution; developing strategic partnerships; leading and/or participating in development teams; and operations and maintenance of infrastructure assets services. The company was formerly known as Prefac Concrete Co. Ltd. and changed its name to Aecon Group Inc. in June 2001. Aecon Group Inc. was founded in 1867 and is headquartered in Toronto, Canada.