Head-To-Head Comparison: Granite Construction (NYSE:GVA) & Brookfield Business (NYSE:BBUC)

Granite Construction (NYSE:GVA) and Brookfield Business (NYSE:BBUC) are both mid-cap industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Risk and Volatility

Granite Construction has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, Brookfield Business has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500.

Insider and Institutional Ownership

85.0% of Brookfield Business shares are held by institutional investors. 0.9% of Granite Construction shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Granite Construction pays an annual dividend of $0.52 per share and has a dividend yield of 0.5%. Brookfield Business pays an annual dividend of $0.25 per share and has a dividend yield of 1.0%. Granite Construction pays out -12.1% of its earnings in the form of a dividend. Brookfield Business pays out -64.1% 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. Brookfield Business is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Recommendations

This is a summary of recent ratings and target prices for Granite Construction and Brookfield Business, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Granite Construction	2	1	2	1	2.33
Brookfield Business	1	2	3	0	2.33

Granite Construction presently has a consensus price target of $158.50, suggesting a potential upside of 39.14%. Brookfield Business has a consensus price target of $39.20, suggesting a potential upside of 53.21%. Given Brookfield Business’ higher possible upside, analysts clearly believe Brookfield Business is more favorable than Granite Construction.

Valuation & Earnings

This table compares Granite Construction and Brookfield Business”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Granite Construction	$4.42 billion	1.13	$193.00 million	($4.31)	-26.43
Brookfield Business	$27.46 billion	0.19	-$26.00 million	($0.39)	-65.60

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

Profitability

This table compares Granite Construction and Brookfield Business’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Granite Construction	-3.32%	27.83%	7.17%
Brookfield Business	1.13%	2.05%	0.40%

About Granite Construction

Granite Construction Incorporated operates as an infrastructure contractor in the United States. It operates through two segments: Construction and Materials segments. The Construction segment engages in the construction and rehabilitation of roads, pavement preservation, bridges, rail lines, airports, marine ports, dams, reservoirs, aqueducts, infrastructure, and site development for use by the public and water-related construction for municipal agencies, commercial water suppliers, industrial facilities, and energy companies; and construction of various complex projects, including infrastructure/site development, mining, public safety, tunnel, solar storage, and power related projects. The Materials segment is involved in the production of aggregates, asphalt concrete, liquid asphalt, and recycled materials production for internal use in our construction projects and sale to third parties. It also offers site preparation, mining, and infrastructure services for residential development, energy development, commercial and industrial sites, railways, residential development, and energy development; and provides construction management professional services. It 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 incorporated in 1922 and is headquartered in Watsonville, California.

About Brookfield Business

Brookfield Business Corporation focuses on healthcare, construction, and wastewater services in the United States, Europe, Australia, the United Kingdom, Canada, and Brazil. It operates through three segments: Business Services, Infrastructure Services, and Industrials. The company operates 42 hospitals; offers construction services for office, residential, hospitality and leisure, social infrastructure, retail, and mixed-use properties; and provides nuclear technology services, such as fuel, maintenance services, engineering solutions, instrumentation and control systems, and manufactured components for nuclear power plants. It also engages in the collection, treatment, and distribution of water and wastewater to the residential and governmental customers. The company was incorporated in 2021 and is headquartered in New York, New York.