Analyzing Orion Group Holdings (ORN) & Stantec (STN)

Orion Group Holdings (NYSE: ORN) and Stantec (NYSE:STN) are both construction companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Insider & Institutional Ownership

87.9% of Orion Group Holdings shares are owned by institutional investors. Comparatively, 57.0% of Stantec shares are owned by institutional investors. 8.0% of Orion Group Holdings 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.

Analyst Recommendations

This is a summary of current ratings and target prices for Orion Group Holdings and Stantec, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orion Group Holdings 0 1 1 0 2.50
Stantec 0 3 2 0 2.40

Orion Group Holdings currently has a consensus target price of $8.50, suggesting a potential upside of 18.06%. Stantec has a consensus target price of $33.75, suggesting a potential upside of 18.01%. Given Orion Group Holdings’ stronger consensus rating and higher possible upside, equities analysts clearly believe Orion Group Holdings is more favorable than Stantec.

Valuation and Earnings

This table compares Orion Group Holdings and Stantec’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Orion Group Holdings $584.49 million 0.35 $31.23 million ($0.21) -34.29
Stantec $2.69 billion 1.21 $288.72 million $0.78 36.67

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

Dividends

Stantec pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. Orion Group Holdings does not pay a dividend. Stantec pays out 51.3% of its earnings in the form of a dividend. Orion Group Holdings has increased its dividend for 4 consecutive years.

Volatility & Risk

Orion Group Holdings has a beta of 1.32, indicating that its stock price is 32% more volatile than the S&P 500. Comparatively, Stantec has a beta of 1.57, indicating that its stock price is 57% more volatile than the S&P 500.

Profitability

This table compares Orion Group Holdings and Stantec’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orion Group Holdings -0.98% 1.37% 0.70%
Stantec 2.31% 10.67% 4.95%

Summary

Stantec beats Orion Group Holdings on 10 of the 17 factors compared between the two stocks.

Orion Group Holdings Company Profile

Orion Group Holdings, Inc., formerly Orion Marine Group, Inc., is engaged in heavy civil construction project management business. The Company specializes in marine construction. It provides a range of heavy civil marine construction services to federal agencies, state and municipal governments, and private commercial and industrial customers. Its heavy civil marine construction and project management services include new construction, dredging, repair and maintenance, and other related specialty services. It provides heavy civil marine construction services on, over and under the water in the continental United States, Alaska, Canada and the Caribbean Basin. It provides heavy civil marine construction services through projects that are obtained primarily through a competitive bid or contract process. It also provides tilt-wall construction services, parking structures, concrete slabs for commercial and institutional applications, curbs, gutters and paving, among other capabilities.

Stantec Company Profile

Stantec Inc. is a provider of professional services in the area of infrastructure and facilities for clients in the public and private sectors. The Company’s operates through four segments Consulting Services-Canada, Consulting Services-United States, Consulting Services-Global and Construction Services. The Company’s services include engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, construction services, project management, and project economics, from initial project concept and planning through to design, construction, commissioning, maintenance, decommissioning and remediation. The Company provides professional consulting services in engineering, architecture, interior design, landscape architecture, surveying, environmental services, project management and project economics in the area of infrastructure and facilities, principally under fee-for-service agreements with clients.

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