Granite Construction (NYSE:GVA) and Jacobs Engineering (NYSE:J) are both construction companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, valuation, earnings, risk, analyst recommendations and profitability.

Assessment and income

This table compares Granite Construction and Jacobs Engineering’s top-line revenue, earnings per share (EPS) and valuation.

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

Dividends

Granite Construction pays an annual dividend of $0.52 per share and has a dividend yield of 1.9%. Jacobs Engineering pays an annual dividend of $0.68 per share and has a dividend yield of 0.7%. Granite Construction pays out 22.2% of its earnings in the form of a dividend. Jacobs Engineering pays out 13.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Institutional and insider property

99.0% of Granite Construction shares are owned by institutional investors. Comparatively, 90.4% of Jacobs Engineering shares are owned by institutional investors. 0.7% of Granite Construction shares are owned by insiders. Comparatively, 1.0% of Jacobs Engineering shares are owned 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.

Profitability

This table compares Granite Construction and Jacobs Engineering’s net margins, return on equity and return on assets.

Volatility and risk

Granite Construction has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500. Comparatively, Jacobs Engineering has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.

Analytical ratings

This is a breakdown of recent recommendations and price targets for Granite Construction and Jacobs Engineering, as reported by MarketBeat.

Granite Construction currently has a consensus price target of $40.75, suggesting a potential upside of 46.85%. Jacobs Engineering has a consensus price target of $110.00, suggesting a potential upside of 20.83%. Given Granite Construction’s higher probable upside, analysts plainly believe Granite Construction is more favorable than Jacobs Engineering.

Summary

Jacobs Engineering beats Granite Construction on 11 of the 14 factors compared between the two stocks.

Granite Construction company Profile

Granite Construction Incorporated operates as an infrastructure contractor and a construction materials producer in the United States. The company operates through Transportation, Water, Specialty, and Materials segments. The Transportation segment engages in the construction and rehabilitation of roads, pavement preservation, bridges, rail lines, airports, and marine ports. The Water segment focuses on water-related construction and water management solutions, as well as provides trenchless cured-in-place pipe rehabilitation services. The Specialty segment constructs various complex projects, including infrastructure/site development, mining, public safety, tunnel, and power projects; and undertakes bid-build, design-build, and construction management/general contractor contracts. The Materials segment focuses on production of aggregates, asphalt, and construction related materials, as well as sanitary and storm water rehabilitation products, such as cured-in-place pipe felt and fiberglass-based lining tubes. The company also engages in the construction of streets, highways, mass transit facilities, trenchless and underground utilities, tunnels, dams, and other infrastructure-related projects. In addition, it performs site preparation and infrastructure services for residential development, energy development, commercial and industrial sites, and other facilities; and provides construction management professional services. The company serves federal agencies, state departments of transportation, local transit authorities, county and city public works departments, school districts and developers, utilities, contractors, landscapers, manufacturers of products requiring aggregate materials, retailers, homeowners, farmers, brokers, and private owners of industrial, commercial, and residential sites. Granite Construction Incorporated was founded in 1922 and is headquartered in Watsonville, California.

Profile engineering company Jacobs

Jacobs Engineering Group, Inc. engages in the provision of a diverse range of technical, professional, and construction services to industrial, commercial, and governmental clients. Jacobs provides professional services through two lines of businesses: Critical Mission Solutions, and People and Places Solutions. Though the Critical Mission Solutions business, it provides cyber security, data analytics, software application development, enterprise and mission IT, systems integration and other technical consulting solutions to government agencies as well as selective aerospace, automotive and telecom customers. Its representative clients include national government departments/agencies in the US, Europe, United Kingdom, Australia, and Asia; state and local departments of transportation within the US; and private industry firms. The People and Places Solutions business provides end-to-end solutions for clients projects which includes connected mobility, water, smart cities, advanced manufacturing or the environment. Its clients include national, state and local government in the U.S., Europe, U.K., Middle East, Australia, New Zealand and Asia, as well as the private sector throughout the world. The company was founded by Joseph J. Jacobs in 1947 and is headquartered in Dallas, TX.

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