Head-To-Head Analysis: Shimizu (OTCMKTS:SHMUY) and Arcosa (NYSE:ACA)

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

Analyst Recommendations

This is a summary of current ratings and recommmendations for Shimizu and Arcosa, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shimizu	0	0	0	0	0.00
Arcosa	0	0	3	0	3.00

Arcosa has a consensus price target of $112.00, indicating a potential upside of 17.09%. Given Arcosa’s stronger consensus rating and higher probable upside, analysts clearly believe Arcosa is more favorable than Shimizu.

Risk and Volatility

Shimizu has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500. Comparatively, Arcosa has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.

Insider & Institutional Ownership

90.7% of Arcosa shares are owned by institutional investors. 1.2% of Arcosa shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Shimizu pays an annual dividend of $0.76 per share and has a dividend yield of 1.7%. Arcosa pays an annual dividend of $0.20 per share and has a dividend yield of 0.2%. Shimizu pays out 26.6% of its earnings in the form of a dividend. Arcosa pays out 10.6% 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.

Profitability

This table compares Shimizu and Arcosa’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%
Arcosa	3.45%	6.25%	3.19%

Earnings & Valuation

This table compares Shimizu and Arcosa”s gross revenue, earnings per share 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
Arcosa	$2.57 billion	1.83	$93.70 million	$1.88	50.88

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

Summary

Arcosa beats Shimizu on 11 of the 16 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 Arcosa

Arcosa, Inc., together with its subsidiaries, provides infrastructure-related products and solutions for the construction, engineered structures, and transportation markets in the United States. It operates through three segments: Construction Products, Engineered Structures, and Transportation Products. The Construction Products segment offers natural and recycled aggregates; specialty materials; and construction site support equipment, including trench shields and shoring products for residential and non-residential construction, and specialty/other products, as well as for infrastructure construction. The Engineered Structures segment offers utility structures, wind towers, traffic structures, and telecommunication structures for electricity transmission and distribution, wind power generation, highway road construction, and wireless communication markets. The Transportation Products segment offers inland barges, fiberglass barge covers, winches, marine hardware, and steel components for railcars and transportation equipment; cast components for industrial and mining sectors; and axles, circular forgings, and coupling devices for freight, tank, locomotive, and passenger rail transportation equipment, as well as other industrial uses. Arcosa, Inc. was incorporated in 2018 and is headquartered in Dallas, Texas.