Critical Analysis: Shimizu (OTCMKTS:SHMUY) vs. CRH (NYSE:CRH)

CRH (NYSE:CRH) and Shimizu (OTCMKTS:SHMUY) are both construction companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, earnings, analyst recommendations and valuation.

Dividends

CRH pays an annual dividend of $1.11 per share and has a dividend yield of 0.9%. Shimizu pays an annual dividend of $0.76 per share and has a dividend yield of 1.7%. CRH pays out 23.2% of its earnings in the form of a dividend. Shimizu pays out 26.6% 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.

Risk and Volatility

CRH has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500. Comparatively, Shimizu has a beta of 0.41, suggesting that its stock price is 59% less volatile than the S&P 500.

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CRH	0	2	10	3	3.07
Shimizu	0	0	0	0	0.00

CRH presently has a consensus price target of $122.77, suggesting a potential upside of 2.44%. Given CRH’s stronger consensus rating and higher possible upside, analysts clearly believe CRH is more favorable than Shimizu.

Earnings & Valuation

This table compares CRH and Shimizu”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CRH	$35.57 billion	2.27	$3.46 billion	$4.78	25.07
Shimizu	$12.77 billion	0.64	$435.70 million	$2.86	15.26

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

Institutional & Insider Ownership

62.5% of CRH shares are owned by institutional investors. 0.1% of CRH shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CRH	9.09%	15.68%	6.83%
Shimizu	3.74%	4.20%	1.56%

Summary

CRH beats Shimizu on 16 of the 17 factors compared between the two stocks.

About CRH

CRH plc, together with its subsidiaries, provides building materials solutions in Ireland and internationally. It operates through four segments: Americas Materials Solutions, Americas Building Solutions, Europe Materials Solutions, and Europe Building Solutions. The company provides solutions for the construction and maintenance of public infrastructure and commercial and residential buildings; and produces and sells aggregates, cement, readymixed concrete, and asphalt, as well as provides paving and construction services. It also manufactures, supplies, and delivers solutions for the built environment in communities across North America; and offers building and infrastructure solutions serving complex critical utility infrastructure, such as water, energy, transportation, and telecommunications projects, and outdoor living solutions for enhancing private and public spaces. In addition, the company combines materials, products, and services to produce a wide range of architectural and infrastructural solutions for use in the building and renovation of critical utility infrastructure, commercial and residential buildings, and outdoor living spaces for the built environment. Further, it produces and supplies precast and pre-stressed concrete products comprising floor and wall elements, beams, vaults, pipes, and manholes; granite, limestone, and sandstone; concrete and polymer-based products, such as underground vaults, drainage systems, utility enclosures, and modular precast structures; engineered steel, polymer-based anchoring, fixing, and connecting solutions; concrete masonry, hardscape and related products, including pavers, blocks and curbs, retaining walls, and slabs; and fencing and railing systems, composite decking, lawn and garden products, and packaged concrete mixes. The company was founded in 1936 and is headquartered in Dublin, Ireland.

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.