Limbach (LMB) & Layne Christensen (LAYN) Financial Review

Limbach (NASDAQ: LMB) and Layne Christensen (NASDAQ:LAYN) are both small-cap construction companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, valuation, earnings, profitability, institutional ownership and dividends.

Volatility & Risk

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Limbach has a beta of 0.71, meaning that its stock price is 29% less volatile than the S&P 500. Comparatively, Layne Christensen has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500.

Profitability

This table compares Limbach and Layne Christensen’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Limbach -0.65% -1.14% -0.27%
Layne Christensen -12.73% -40.46% -6.33%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Limbach and Layne Christensen, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Limbach 0 0 1 0 3.00
Layne Christensen 0 1 0 0 2.00

Limbach currently has a consensus target price of $18.00, indicating a potential upside of 35.34%. Layne Christensen has a consensus target price of $11.00, indicating a potential downside of 25.68%. Given Limbach’s stronger consensus rating and higher possible upside, analysts plainly believe Limbach is more favorable than Layne Christensen.

Earnings & Valuation

This table compares Limbach and Layne Christensen’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Limbach $485.74 million 0.21 $1.87 million $0.22 60.45
Layne Christensen $601.97 million 0.49 -$52.23 million ($1.76) -8.41

Limbach has higher earnings, but lower revenue than Layne Christensen. Layne Christensen is trading at a lower price-to-earnings ratio than Limbach, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

28.0% of Limbach shares are held by institutional investors. Comparatively, 95.0% of Layne Christensen shares are held by institutional investors. 82.9% of Limbach shares are held by insiders. Comparatively, 12.0% of Layne Christensen shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Limbach beats Layne Christensen on 11 of the 14 factors compared between the two stocks.

About Limbach

Limbach Holdings, Inc. provides commercial specialty contractor services in the United States. It operates in two segments, Construction and Service. The company provides services in the areas of HVAC (heating, ventilation, and air-conditioning), plumbing, electrical, and building controls for the design and construction of new and renovated buildings; maintenance services; and equipment upgrades. Its facility services comprise mechanical construction, HVAC service and maintenance, energy audits and retrofits, engineering and design build, constructability evaluation, equipment and materials selection, offsite/prefab construction, and sustainable building solutions and practices. The company’s customers include healthcare facilities; education, including schools and universities; sports and amusement, including arenas and related facilities; transportation, including passenger terminals and maintenance facilities for rail and airports; government facilities, including federal, state, and local agencies; hospitality, including hotels and resorts; corporate and commercial office buildings; retail and mixed use; residential multifamily apartment buildings (excluding condominiums); and industrial manufacturing. It serves customers primarily located in Florida, California, Massachusetts, New Jersey, Pennsylvania, Maryland, Virginia, West Virginia, Ohio, Michigan, and Washington, D.C. The company was founded in 1901 and is headquartered in Pittsburgh, Pennsylvania.

About Layne Christensen

Layne Christensen Company operates as a water management, construction, and drilling company that provides solutions for the water, mineral, and energy markets in the United States and internationally. The company's Water Resources segment offers water-related products and services, including hydrologic design and construction; source of supply exploration; well and intake construction; and well and pump rehabilitation services. This segment also provides water treatment equipment engineering services and systems for the treatment of regulated and nuisance contaminants. Its Inliner segment provides process, sanitary, and storm water rehabilitation solutions to municipalities and industrial customers dealing with aging infrastructure needs, as well as other rehabilitative methods, such as Janssen structural renewal for service lateral connections and mainlines, slip lining, traditional excavation and replacement, and manhole renewal with cementitious and epoxy products. The company's Heavy Civil segment offers water and wastewater treatment plants design and construction, and pipeline installation services; provides surface water intakes, pumping stations, and hard rock tunnels; offers marine construction services; and designs and constructs biogas facilities. Its Mineral Services segment conducts above ground drilling activities comprising core drilling, reverse circulation, dual tube, hammer, and rotary air-blast methods; and provides exploratory and definition drilling services. The company serves government agencies, investor-owned utilities, industrial companies, global mining companies, consulting engineering firms, heavy civil construction contractors, oil and gas companies, power companies, and agribusinesses. The company was formerly known as Layne Inc. and changed its name to Layne Christensen Company in June 1996. Layne Christensen Company was founded in 1882 and is headquartered in The Woodlands, Texas.

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