Head-To-Head Comparison: Babcock International Group (OTCMKTS:BCKIY) and KBR (NYSE:KBR)

Babcock International Group (OTCMKTS:BCKIY) and KBR (NYSE:KBR) are both mid-cap construction companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Babcock International Group and KBR, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Babcock International Group	0	0	0	1	4.00
KBR	0	5	4	0	2.44

KBR has a consensus target price of $62.78, indicating a potential upside of 28.63%. Given KBR’s higher probable upside, analysts clearly believe KBR is more favorable than Babcock International Group.

Dividends

Babcock International Group pays an annual dividend of $0.10 per share and has a dividend yield of 0.6%. KBR pays an annual dividend of $0.66 per share and has a dividend yield of 1.4%. KBR pays out 23.9% of its earnings in the form of a dividend. KBR has increased its dividend for 6 consecutive years. KBR is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

97.0% of KBR shares are owned by institutional investors. 1.1% of KBR 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.

Valuation & Earnings

This table compares Babcock International Group and KBR”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Babcock International Group	$6.16 billion	1.33	$315.25 million	N/A	N/A
KBR	$7.74 billion	0.81	$375.00 million	$2.76	17.68

KBR has higher revenue and earnings than Babcock International Group.

Volatility and Risk

Babcock International Group has a beta of 1.71, indicating that its share price is 71% more volatile than the S&P 500. Comparatively, KBR has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500.

Profitability

This table compares Babcock International Group and KBR’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Babcock International Group	N/A	N/A	N/A
KBR	4.52%	33.65%	7.33%

Summary

KBR beats Babcock International Group on 11 of the 16 factors compared between the two stocks.

About Babcock International Group

Babcock International Group PLC, together with its subsidiaries, provides value-add services for aerospace, defense, and security in the United Kingdom, rest of Europe, Africa, North America, Australasia, and internationally. The company operates through four segments: Marine, Nuclear, Land, and Aviation. It designs, procures, operates, and manages critical utility and process equipment; offers asset management, defense and maritime training, information and intelligence, equipment and system, and facilities and infrastructure services, as well as naval platforms; and designs, manufactures, and provides through-life support for mechanical and electrical systems and equipment. The company also offers naval architecture, engineering, and project management services; submarines and complex engineering services in support of various decommissioning programs and projects, training and operation support, new build program management, and design and installation; critical vehicle fleet management, and equipment support and training services for military and civil customers; and designs, assesses, manufactures, installs, maintains, and decommissions vehicles for police, fire and ambulance, civil service, military, and other security-focused organizations. In addition, it provides plain line track renewal services; and engineering services for track projects, signaling, telecommunications, and on-track plants. Further, the company offers critical engineering services to defense and civil customers, including pilot training, equipment support, and airbase management, as well as operates aviation fleets that provide delivering emergency services. The company was founded in 1891 and is headquartered in London, the United Kingdom.

About KBR

KBR, Inc. provides scientific, technology, and engineering solutions to governments and commercial customers worldwide. It operates through Government Solutions and Sustainable Technology Solutions segments. The Government Solutions segment offers life-cycle support solutions to defense, intelligence, space, aviation, and other programs and missions for military and other government agencies in the United States, the United Kingdom, and Australia. Its services cover research and development, advanced prototyping, acquisition support, systems engineering, cyber analytics, space domain awareness, test and evaluation, systems integration and program management, global supply chain management, and operations readiness and support, as well as command, control, communications, computers, intelligence, surveillance, and reconnaissance services. This segment also provides various professional advisory services to the defense, renewable energy, and critical infrastructure sectors. The Sustainable Technology Solutions segment operates portfolio of various proprietary process technologies for ammonia/syngas, chemical/petrochemicals, clean refining, and circular process/circular economy solutions. This segment also provides synergistic services, including advisory and consulting focused on broad-based energy transition and net-zero carbon emission solutions; high-end engineering, design and program management centered around decarbonization, energy efficiency, environmental impact and asset optimization; and digitally-enabled operating and monitoring solutions. KBR, Inc. was founded in 1901 and is headquartered in Houston, Texas.