Contrasting Obayashi (OTCMKTS:OBYCF) & Arcosa (NYSE:ACA)

Obayashi (OTCMKTS:OBYCF) and Arcosa (NYSE:ACA) are both construction companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.

Volatility and Risk

Obayashi has a beta of 0.39, meaning that its stock price is 61% less volatile than the S&P 500. Comparatively, Arcosa has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Obayashi and Arcosa, as reported by MarketBeat.

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

Arcosa has a consensus price target of $112.00, suggesting a potential upside of 19.16%. Given Arcosa’s stronger consensus rating and higher possible upside, analysts clearly believe Arcosa is more favorable than Obayashi.

Insider and Institutional Ownership

90.7% of Arcosa shares are owned by institutional investors. 2.0% of Arcosa shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Obayashi and Arcosa’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Obayashi	5.35%	7.36%	2.92%
Arcosa	3.45%	6.25%	3.19%

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Obayashi	$17.21 billion	0.70	$976.81 million	$1.28	13.13
Arcosa	$2.57 billion	1.79	$93.70 million	$1.88	49.99

Obayashi has higher revenue and earnings than Arcosa. Obayashi 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 Obayashi on 10 of the 14 factors compared between the two stocks.

About Obayashi

Obayashi Corporation engages in the construction business in Japan, North America, Asia, the Middle East, Europe, and Oceania. The company constructs buildings, including offices, condominiums, commercial facilities, factories, hospitals, and schools; and civil engineering projects, such as tunnels, bridges, dams, river works, urban civil engineering structures, railroads, and expressways. It is also involved in the development and leasing of real estate properties in various locations, primarily in urban areas, as well as property management activities; solar, biomass, geothermal, and wind power generation business; and PPP and agriculture business. In addition, the company provides non-life insurance agency business. Further, it engages in the provision of urban redevelopment, contracted operations, and facility management services, as well as M&E design and construction activities. The company was founded in 1892 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.