Financial Analysis: Shimmick (NASDAQ:SHIM) and GFL Environmental (NYSE:GFL)

GFL Environmental (NYSE:GFL) and Shimmick (NASDAQ:SHIM) are both business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares GFL Environmental and Shimmick’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GFL Environmental	56.61%	3.66%	1.50%
Shimmick	-5.19%	N/A	-9.25%

Analyst Ratings

This is a summary of recent ratings and price targets for GFL Environmental and Shimmick, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GFL Environmental	0	3	11	1	2.87
Shimmick	1	0	2	0	2.33

GFL Environmental presently has a consensus target price of $56.67, suggesting a potential upside of 37.17%. Shimmick has a consensus target price of $5.50, suggesting a potential upside of 57.77%. Given Shimmick’s higher possible upside, analysts clearly believe Shimmick is more favorable than GFL Environmental.

Insider and Institutional Ownership

64.7% of GFL Environmental shares are held by institutional investors. Comparatively, 6.9% of Shimmick shares are held by institutional investors. 8.7% of GFL Environmental shares are held by company insiders. Comparatively, 77.0% of Shimmick shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares GFL Environmental and Shimmick”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GFL Environmental	$4.73 billion	3.12	$2.74 billion	$6.80	6.08
Shimmick	$492.84 million	0.26	-$25.58 million	($0.73)	-4.78

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

Risk & Volatility

GFL Environmental has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Shimmick has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Summary

GFL Environmental beats Shimmick on 13 of the 15 factors compared between the two stocks.

About GFL Environmental

GFL Environmental Inc. offers non-hazardous solid waste management and environmental services in Canada and the United States. It offers solid waste management, liquid waste management, and soil remediation services, including collection, transportation, transfer, recycling, and disposal services for municipal, residential, and commercial, and industrial customers. The company was incorporated in 2007 and is headquartered in Vaughan, Canada.

About Shimmick

Shimmick Corporation provides water and other critical infrastructure solutions in the United States. The company undertakes water and wastewater treatment infrastructure; water storage and conveyance, including dams, levees, flood control systems, pump stations, and coastal protection infrastructure; and mass transit, bridges, and military infrastructure projects. It serves federal, state, and local governments. The company was formerly known as SCCI National Holdings, Inc. and changed its name to Shimmick Corporation in September 2023. Shimmick Corporation was founded in 1990 and is headquartered in Irvine, California. Shimmick Corporation operates as a subsidiary of GOHO, LLC.