Quanta Services (PWR) versus Its Competitors Critical Review

Quanta Services (NYSE:PWR) is one of 188 public companies in the “Construction & Engineering” industry, but how does it contrast to its rivals? We will compare Quanta Services to similar businesses based on the strength of its institutional ownership, earnings, analyst recommendations, valuation, dividends, profitability and risk.

Analyst Ratings

This is a summary of current ratings and price targets for Quanta Services and its rivals, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quanta Services	3	6	23	1	2.67
Quanta Services Competitors	850	3467	7359	362	2.60

Quanta Services presently has a consensus target price of $763.31, suggesting a potential upside of 28.91%. As a group, “Construction & Engineering” companies have a potential upside of 42.72%. Given Quanta Services’ rivals higher possible upside, analysts clearly believe Quanta Services has less favorable growth aspects than its rivals.

Dividends

Quanta Services pays an annual dividend of $0.44 per share and has a dividend yield of 0.1%. Quanta Services pays out 4.0% of its earnings in the form of a dividend. As a group, “Construction & Engineering” companies pay a dividend yield of 2.3% and pay out 25.4% of their earnings in the form of a dividend. Quanta Services has increased its dividend for 6 consecutive years.

Profitability

This table compares Quanta Services and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Quanta Services	4.51%	23.56%	8.13%
Quanta Services Competitors	-4.01%	2.74%	3.81%

Risk and Volatility

Quanta Services has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500. Comparatively, Quanta Services’ rivals have a beta of 1.60, indicating that their average stock price is 60% more volatile than the S&P 500.

Institutional & Insider Ownership

90.5% of Quanta Services shares are owned by institutional investors. Comparatively, 48.9% of shares of all “Construction & Engineering” companies are owned by institutional investors. 0.6% of Quanta Services shares are owned by company insiders. Comparatively, 20.9% of shares of all “Construction & Engineering” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Quanta Services and its rivals revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Quanta Services	$28.48 billion	$1.03 billion	53.64
Quanta Services Competitors	$9.57 billion	$456.60 million	-5,814.98

Quanta Services has higher revenue and earnings than its rivals. Quanta Services is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Summary

Quanta Services beats its rivals on 11 of the 15 factors compared.

About Quanta Services

Quanta Services, Inc. provides infrastructure solutions for the electric and gas utility, renewable energy, communications, and pipeline and energy industries in the United States, Canada, Australia, and internationally. The company’s Electric Power Infrastructure Solutions segment engages in the design, procurement, construction, upgrade, repair, and maintenance of electric power transmission and distribution infrastructure and substation facilities; installation, maintenance, and upgrade of electric power infrastructure projects; installation of smart grid technologies on electric power networks; and design, installation, maintenance, and repair of commercial and industrial wirings. This segment also offers aviation services; emergency restoration services; and other engineering and technical services; design and construction solutions to wireline and wireless communications, cable multi-system operators, and other customers; and training for electric workers, as well as training for the gas distribution and communications industries. The company’s Renewable Energy Infrastructure Solutions segment is involved in engineering, procurement, construction, repair, and maintenance of wind, solar, and hydropower generation facilities, as well as battery storage facilities; and provision of engineering and construction services for substations and switchyards, transmission, and other electrical infrastructures. The company’s Underground Utility and Infrastructure Solutions segment offers design, engineering, procurement, construction, upgrade, repair, and maintenance services for natural gas systems for gas utility customers; fabrication services for pipeline support systems and structures and facilities; and engineering and construction services for pipeline and storage systems, and compressor and pump stations. The company was formerly known as Fabal Construction, Inc. and changed its name to Quanta Services, Inc. in November 1997. The company was incorporated in 1997 and is headquartered in Houston, Texas.