Contrasting KBR (KBR) & Great Lakes Dredge and Dock (GLDD)

KBR (NYSE: KBR) and Great Lakes Dredge and Dock (NASDAQ:GLDD) are both construction companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.

Insider & Institutional Ownership

99.7% of KBR shares are held by institutional investors. Comparatively, 76.3% of Great Lakes Dredge and Dock shares are held by institutional investors. 0.8% of KBR shares are held by company insiders. Comparatively, 8.2% of Great Lakes Dredge and Dock shares are held 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 KBR and Great Lakes Dredge and Dock’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KBR 13.04% 19.32% 5.74%
Great Lakes Dredge and Dock -3.51% -7.17% -1.94%

Earnings & Valuation

This table compares KBR and Great Lakes Dredge and Dock’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KBR $4.17 billion 0.59 $434.00 million $1.49 11.70
Great Lakes Dredge and Dock $702.50 million 0.43 -$31.26 million ($0.27) -18.15

KBR has higher revenue and earnings than Great Lakes Dredge and Dock. Great Lakes Dredge and Dock is trading at a lower price-to-earnings ratio than KBR, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for KBR and Great Lakes Dredge and Dock, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KBR 0 2 4 0 2.67
Great Lakes Dredge and Dock 0 1 1 0 2.50

KBR currently has a consensus price target of $19.67, indicating a potential upside of 12.77%. Great Lakes Dredge and Dock has a consensus price target of $7.00, indicating a potential upside of 42.86%. Given Great Lakes Dredge and Dock’s higher probable upside, analysts plainly believe Great Lakes Dredge and Dock is more favorable than KBR.

Risk & Volatility

KBR has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, Great Lakes Dredge and Dock has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500.

Dividends

KBR pays an annual dividend of $0.32 per share and has a dividend yield of 1.8%. Great Lakes Dredge and Dock does not pay a dividend. KBR pays out 21.5% of its earnings in the form of a dividend.

Summary

KBR beats Great Lakes Dredge and Dock on 13 of the 16 factors compared between the two stocks.

About KBR

KBR, Inc. provides professional services and technologies across the asset and program life-cycle within the government services and hydrocarbons industries worldwide. The company operates through three segments: Government Services, Technology & Consulting, and Engineering & Construction. The Government Services segment offers life-cycle support solutions to defense, space, aviation, and other programs and missions for government agencies in the United States, the United Kingdom, and Australia. This segment's services include research and development, test and evaluation, program management and consulting, operational and platform support, logistics and facilities, training, and security. The Technology & Consulting segment provides proprietary technology that focuses on the monetization of hydrocarbons primarily natural gas and natural gas liquids, as well as ethylene and petrochemicals; ammonia, nitric acid and fertilizers; oil refining; gasification; oil and gas consulting; integrity management; naval architecture and proprietary hulls; and downstream consulting. The Engineering & Construction segment offers engineering, procurement, and construction (EPC) solutions for onshore oil and gas; LNG (liquefaction and regasification)/gas to liquids; oil refining; petrochemicals; chemicals; fertilizers; and offshore oil and gas, including shallow-water, deep-water, and subsea. This segment also provides floating solutions, including floating production units; floating production, storage, and offshore; floating liquefied natural gas; and floating storage and regasification units, as well as differentiated EPC, program management, and maintenance services. KBR, Inc. was founded in 1901 and is headquartered in Houston, Texas.

About Great Lakes Dredge and Dock

Great Lakes Dredge & Dock Corporation provides dredging services in the United States and internationally. It operates through two segments, Dredging, and Environmental & Infrastructure. The Dredging segment is involved in capital dredging that consists of port expansion projects, coastal restoration and land reclamations, trench digging for pipelines, tunnels and cables, and other dredging related to the construction of breakwaters, jetties, canals, and other marine structures. This segment also engages in channel deepening and port infrastructure development; coastal protection projects; re-dredging previously deepened waterways and harbors; and lake and river dredging, inland levee and construction dredging, environmental restoration and habitat improvement, and other marine construction projects. It serves federal, state, and local governments; foreign governments; and domestic and foreign private concerns, such as utilities, oil, and other energy companies. The Environmental & Infrastructure segment provides environmental and geotechnical construction services, including the creation, repair, or stabilization of environmental barriers; and remediation services comprising the containment, immobilization, or removal of contamination from an environment. It serves general contractors, corporations, superfund potentially responsible parties, and environmental engineering and construction firms, as well as federal and municipal government agencies. The company operates a fleet of 20 dredges, 16 material transportation barges, 1 drillboat, and various other support vessels. The company was formerly known as Lydon & Drews Partnership and changed its name to Great Lakes Dredge & Dock Corporation in 1905. Great Lakes Dredge & Dock Corporation was founded in 1890 and is headquartered in Oak Brook, Illinois.

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