Reviewing Advanced Drainage Systems (NYSE:WMS) and Shimizu (OTCMKTS:SHMUY)

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

Valuation & Earnings

This table compares Shimizu and Advanced Drainage Systems”s top-line 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	$3.94	11.08
Advanced Drainage Systems	$2.90 billion	4.06	$450.17 million	$5.86	25.87

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

Risk and Volatility

Shimizu has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500. Comparatively, Advanced Drainage Systems has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.

Profitability

This table compares Shimizu and Advanced Drainage Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shimizu	5.05%	3.76%	1.40%
Advanced Drainage Systems	15.35%	28.85%	12.36%

Dividends

Shimizu pays an annual dividend of $0.76 per share and has a dividend yield of 1.7%. Advanced Drainage Systems pays an annual dividend of $0.72 per share and has a dividend yield of 0.5%. Shimizu pays out 19.3% of its earnings in the form of a dividend. Advanced Drainage Systems pays out 12.3% 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. Advanced Drainage Systems has increased its dividend for 1 consecutive years.

Insider and Institutional Ownership

89.8% of Advanced Drainage Systems shares are owned by institutional investors. 1.6% of Advanced Drainage Systems 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.

Analyst Ratings

This is a breakdown of recent ratings for Shimizu and Advanced Drainage Systems, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shimizu	0	0	0	0	0.00
Advanced Drainage Systems	0	2	8	0	2.80

Advanced Drainage Systems has a consensus target price of $160.44, indicating a potential upside of 5.86%. Given Advanced Drainage Systems’ stronger consensus rating and higher probable upside, analysts clearly believe Advanced Drainage Systems is more favorable than Shimizu.

Summary

Advanced Drainage Systems beats Shimizu on 15 of the 17 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 Advanced Drainage Systems

Advanced Drainage Systems, Inc. designs, manufactures, and markets thermoplastic corrugated pipes and related water management products in North America and internationally. The company operates through Pipe, International, Infiltrator, and Allied Products & Other segments. It offers single, double, and triple wall corrugated polypropylene and polyethylene pipes; plastic leachfield chambers and systems; EZflow synthetic aggregate bundles; wastewater purification through mechanical aeration wastewater for residential and commercial systems; septic tanks and accessories; combined treatment and dispersal systems, including advanced enviro-septic and advanced treatment leachfield systems; and allied products, including storm retention/detention and septic chambers, polyvinyl chloride drainage structures, fittings, and water quality filters and separators. The company also purchases and distributes construction fabrics and other geosynthetic products for soil stabilization, reinforcement, filtration, separation, erosion control, and sub-surface drainage, as well as drainage grates and other products. In addition, it provides PVC hubs, rubber sleeves, and stainless-steel bands. The company offers its products for non-residential, residential, agriculture, and infrastructure applications through a network of distribution centers. Advanced Drainage Systems, Inc. incorporated in 1966 and is headquartered in Hilliard, Ohio.