Reviewing Grana y Montero S.A.A. (NYSE:GRAM) and Fluor Corporation (FLR)

Grana y Montero S.A.A. (NYSE: GRAM) and Fluor Corporation (NYSE:FLR) are both construction companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Insider and Institutional Ownership

11.8% of Grana y Montero S.A.A. shares are held by institutional investors. Comparatively, 84.1% of Fluor Corporation shares are held by institutional investors. 27.4% of Grana y Montero S.A.A. shares are held by insiders. Comparatively, 1.3% of Fluor Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Fluor Corporation pays an annual dividend of $0.84 per share and has a dividend yield of 1.8%. Grana y Montero S.A.A. does not pay a dividend. Fluor Corporation pays out 58.7% of its earnings in the form of a dividend.

Risk & Volatility

Grana y Montero S.A.A. has a beta of 0.79, meaning that its share price is 21% less volatile than the S&P 500. Comparatively, Fluor Corporation has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.

Profitability

This table compares Grana y Montero S.A.A. and Fluor Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Grana y Montero S.A.A. 1.73% 3.37% 1.14%
Fluor Corporation 1.03% 11.69% 4.24%

Earnings and Valuation

This table compares Grana y Montero S.A.A. and Fluor Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Grana y Montero S.A.A. $1.77 billion 0.28 $2.54 million $0.24 15.42
Fluor Corporation $19.04 billion 0.35 $281.40 million $1.43 32.90

Fluor Corporation has higher revenue and earnings than Grana y Montero S.A.A.. Grana y Montero S.A.A. is trading at a lower price-to-earnings ratio than Fluor Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Grana y Montero S.A.A. and Fluor Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Grana y Montero S.A.A. 2 0 0 0 1.00
Fluor Corporation 0 6 4 0 2.40

Fluor Corporation has a consensus price target of $47.60, suggesting a potential upside of 1.19%. Given Fluor Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Fluor Corporation is more favorable than Grana y Montero S.A.A..

Summary

Fluor Corporation beats Grana y Montero S.A.A. on 12 of the 16 factors compared between the two stocks.

About Grana y Montero S.A.A.

Grana y Montero SAA is a Peru-based holding company primarily engaged in the four business areas: Construction and Engineering Industry, Real Estate, Oil Services, and Operation of Public Concessions and Business Support Services. Through its subsidiaries, the Company provides such services as the development and management of real estate properties and leisure facilities; the exploration, production and sale of oil, natural gas and its derivates; the storage and distribution of combustibles; information technology services; engineering consultancy; the operation and maintenance of rails and roads concessions; as well as the execution and management of projects related to the generation of electric power; among others. The Company owns such subsidiaries as GMD SA, Adexus SA, Concar SA, Survial SA, Norvial SA and Promotores Asociados de Inmobiliarios SA, among others.

About Fluor Corporation

Fluor Corporation (Fluor) is a holding company. The Company operates its business in four segments: Energy, Chemicals & Mining; Industrial, Infrastructure & Power; Government, and Maintenance, Modification & Asset Integrity (MMAI). The Company, through its subsidiaries, offers professional services providing engineering, procurement, construction, fabrication and modularization, commissioning and maintenance, as well as project management services on a global basis. The Company is an integrated solutions provider for various industries, including oil and gas, chemicals and petrochemicals, mining and metals, transportation, power, life sciences and advanced manufacturing. It is also a service provider to the United States federal Government and governments abroad. It offers services in various categories, including engineering and design, procurement, construction, fabrication, maintenance, modification and asset integrity and project management.

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