Financial Survey: Ameresco (AMRC) versus TopBuild (BLD)

Ameresco (NYSE: AMRC) and TopBuild (NYSE:BLD) are both utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares Ameresco and TopBuild’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ameresco 6.02% 13.66% 4.68%
TopBuild 9.52% 11.49% 6.37%

Risk and Volatility

Ameresco has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500. Comparatively, TopBuild has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500.

Institutional and Insider Ownership

24.9% of Ameresco shares are owned by institutional investors. Comparatively, 91.1% of TopBuild shares are owned by institutional investors. 57.9% of Ameresco shares are owned by company insiders. Comparatively, 1.3% of TopBuild shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Ameresco and TopBuild, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ameresco 0 0 3 0 3.00
TopBuild 0 0 6 0 3.00

Ameresco presently has a consensus price target of $13.17, suggesting a potential upside of 9.72%. TopBuild has a consensus price target of $95.00, suggesting a potential upside of 21.27%. Given TopBuild’s higher probable upside, analysts clearly believe TopBuild is more favorable than Ameresco.

Valuation and Earnings

This table compares Ameresco and TopBuild’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ameresco $717.15 million 0.80 $37.49 million $0.76 15.79
TopBuild $1.91 billion 1.47 $158.13 million $2.78 28.18

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

Summary

TopBuild beats Ameresco on 10 of the 13 factors compared between the two stocks.

Ameresco Company Profile

Ameresco, Inc. provides comprehensive energy services for businesses and organizations in North America and Europe. It offers energy efficiency, infrastructure upgrades, energy security and resilience, asset sustainability, and renewable energy solutions. The company operates through U.S. Regions, U.S. Federal, Canada, and Non-Solar Distributed Generation segments. It designs, develops, engineers, and installs projects that reduce the energy, as well as operations and maintenance costs of customers' facilities. The company's projects primarily include various measures customized for the facility and designed to enhance the efficiency of building systems, such as heating, ventilation, cooling, and lighting systems. It also offers renewable energy products and services, such as the construction of small-scale plants for customers that produce electricity, gas, heat, or cooling from renewable sources of energy; and sells electricity and processed renewable gas fuel, heat, or cooling. In addition, the company provides enterprise energy management and consulting services; and sells solar photovoltaic (PV) energy products and systems. It serves federal, state, and local governments, as well as healthcare and educational institutions, housing authorities, and commercial and industrial customers. As of December 31, 2017, the company owned and operated 73 small-scale renewable energy plants and solar PV installations. Ameresco, Inc. was founded in 2000 and is headquartered in Framingham, Massachusetts.

TopBuild Company Profile

TopBuild Corp. engages in the installation, distribution, and sale of insulation and other building products to the United States construction industry. The company operates in two segments, Installation and Distribution. It offers rain gutters, garage doors, fireplaces, fireproofing and firestopping products, shower enclosures, closet shelves, accessories, and other building products; and residential insulation services. The company also provides various services and tools that are designed to assist builders in applying the principles of building science to new home construction, which includes pre-construction plan reviews, various inspection services, and diagnostic testing; and home energy rating services. It serves single-family homebuilders, local/single-family custom builders, multi-family builders, commercial general contractors, remodelers, and individual homeowners, as well as insulation contractors, gutter contractors, weatherization contractors, other contractors, dealers, metal building erectors, and modular home builders. TopBuild Corp. has approximately 175 installation branches located in 41 states, and 70 distribution centers in 32 states. The company was formerly known as Masco SpinCo Corp. and changed its name to TopBuild Corp. in March 2015. TopBuild Corp. was incorporated in 2015 and is headquartered in Daytona Beach, Florida.

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