Analyzing Shimizu (OTCMKTS:SHMUY) and Frontdoor (NASDAQ:FTDR)

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

Valuation and Earnings

This table compares Shimizu and Frontdoor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shimizu	$12.77 billion	0.64	$435.70 million	$2.86	15.26
Frontdoor	$1.84 billion	2.65	$235.00 million	$3.39	19.79

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

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Shimizu and Frontdoor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shimizu	0	0	0	0	0.00
Frontdoor	1	1	2	1	2.60

Frontdoor has a consensus price target of $59.75, suggesting a potential downside of 10.93%. Given Frontdoor’s stronger consensus rating and higher probable upside, analysts plainly believe Frontdoor is more favorable than Shimizu.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Shimizu	3.74%	4.20%	1.56%
Frontdoor	13.07%	125.21%	15.65%

Volatility & Risk

Shimizu has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Frontdoor has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500.

Summary

Frontdoor beats Shimizu on 11 of the 13 factors compared between the two stocks.

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.

About Frontdoor

Frontdoor, Inc. provides home warranties in the United States in the United States. Its customizable home warranties help customers protect and maintain their homes from costly and unplanned breakdowns of essential home systems and appliances. The company’s home warranty customers subscribe to an annual service plan agreement that covers the repair or replacement of principal components of approximately 20 home systems and appliances, including electrical, plumbing, water heaters, refrigerators, dishwashers, and ranges/ovens/cooktops, as well as electronics, pools, and spas and pumps; and heating, ventilation, and air conditioning systems. It also offers on-demand home services and a one-stop app experience for home repair and maintenance; and Streem technology, an app that empowers homeowners by connecting them in real time through video chat with qualified experts to diagnose and solve their problems. The company serves homeowners under the Frontdoor, American Home Shield, HSA, OneGuard, Landmark Home Warranty, Frontdoor logo, and Streem brands. The company was founded in 1971 and is headquartered in Memphis, Tennessee.