Critical Review: Energy Services of America (NASDAQ:ESOA) & AECOM (NYSE:ACM)

AECOM (NYSE:ACM) and Energy Services of America (NASDAQ:ESOA) are both industrials companies, but which is the better business? We will contrast the two companies based on the strength of their risk, institutional ownership, earnings, dividends, valuation, analyst recommendations and profitability.

Valuation & Earnings

This table compares AECOM and Energy Services of America”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AECOM	$16.14 billion	0.50	$561.77 million	$2.18	28.83
Energy Services of America	$467.37 million	N/A	N/A	$0.18	60.60

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

Profitability

This table compares AECOM and Energy Services of America’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AECOM	1.87%	19.72%	4.10%
Energy Services of America	N/A	N/A	N/A

Dividends

AECOM pays an annual dividend of $1.24 per share and has a dividend yield of 2.0%. Energy Services of America pays an annual dividend of $0.16 per share and has a dividend yield of 1.4%. AECOM pays out 56.9% of its earnings in the form of a dividend. Energy Services of America pays out 87.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AECOM has increased its dividend for 3 consecutive years. AECOM is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for AECOM and Energy Services of America, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AECOM	2	2	9	0	2.54
Energy Services of America	0	1	1	0	2.50

AECOM presently has a consensus target price of $88.25, suggesting a potential upside of 40.40%. Energy Services of America has a consensus target price of $25.00, suggesting a potential upside of 125.43%. Given Energy Services of America’s higher probable upside, analysts plainly believe Energy Services of America is more favorable than AECOM.

Institutional & Insider Ownership

85.4% of AECOM shares are held by institutional investors. Comparatively, 2.1% of Energy Services of America shares are held by institutional investors. 0.5% of AECOM shares are held by insiders. Comparatively, 44.7% of Energy Services of America 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.

Summary

AECOM beats Energy Services of America on 11 of the 14 factors compared between the two stocks.

About AECOM

AECOM, together with its subsidiaries, provides professional infrastructure consulting services worldwide. It operates in three segments: Americas, International, and AECOM Capital. The company offers planning, consulting, architectural and engineering design, construction and program management, and investment and development services to public and private clients. It is also involved in the investment and development of real estate projects. In addition, the company provides construction services, including building construction and energy, and infrastructure and industrial construction. It serves transportation, water, government, facilities, environmental, and energy sectors. The company was formerly known as AECOM Technology Corporation and changed its name to AECOM in January 2015. AECOM was incorporated in 1980 and is headquartered in Dallas, Texas.

About Energy Services of America

Energy Services of America Corporation, together with its subsidiaries, provides contracting services for utilities and energy related companies in the United States. The company constructs, replaces, and repairs interstate and intrastate natural gas pipelines and storage facilities for utility companies and private natural gas companies; and provides services relating to pipeline, storage facilities, and plant works. It also offers electrical and mechanical installation, and repair services, including substation and switchyard, site preparation, equipment setting, pipe fabrication and installation, packaged buildings, transformers, and other ancillary works for the gas, petroleum power, chemical, water and sewer, and automotive industries. In addition, the company provides corrosion protection services, horizontal drilling services, liquid pipeline and pump station construction, production facility construction, water and sewer pipeline installation, and various maintenance and repair services, as well as other services related to pipeline construction. Further, it serves customers primarily in West Virginia, Virginia, Ohio, Pennsylvania, and Kentucky. Energy Services of America Corporation was incorporated in 2006 and is based in Huntington, West Virginia.