Critical Review: WSP Global (OTCMKTS:WSPOF) and Matrix Service (NASDAQ:MTRX)

Matrix Service (NASDAQ:MTRX) and WSP Global (OTCMKTS:WSPOF) are both industrials companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Profitability

This table compares Matrix Service and WSP Global’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Matrix Service	-0.30%	5.32%	1.20%
WSP Global	5.34%	12.52%	5.34%

Institutional & Insider Ownership

78.4% of Matrix Service shares are owned by institutional investors. 4.4% of Matrix Service shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Matrix Service and WSP Global”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Matrix Service	$873.63 million	0.34	-$2.58 million	($0.09)	-117.89
WSP Global	$13.09 billion	1.34	$690.15 million	$3.69	35.14

WSP Global has higher revenue and earnings than Matrix Service. Matrix Service is trading at a lower price-to-earnings ratio than WSP Global, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Matrix Service and WSP Global, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Matrix Service	1	0	1	1	2.67
WSP Global	0	0	5	0	3.00

Matrix Service currently has a consensus target price of $16.50, suggesting a potential upside of 55.51%. Given Matrix Service’s higher possible upside, equities research analysts plainly believe Matrix Service is more favorable than WSP Global.

Summary

WSP Global beats Matrix Service on 10 of the 14 factors compared between the two stocks.

About Matrix Service

Matrix Service Company provides engineering, fabrication, construction, and maintenance services to support critical energy infrastructure and industrial markets in the United States, Canada, and internationally. It operates through three segments: Utility and Power Infrastructure; Process and Industrial Facilities; and Storage and Terminal Solutions. The Utility and Power Infrastructure segment offers power delivery services, including construction of new substations, upgrades of existing substations, transmission and distribution line installations, and upgrades and maintenance, and emergency and storm restoration services. This segment also provides engineering, fabrication, and construction services for LNG utility peak shaving facilities; and construction and maintenance services to power generation facilities, including natural gas fired facilities. The Process and Industrial Facilities segment engages in the refining and processing of crude oil; fractionating and marketing of natural, gas and natural gas liquids; and offers plant maintenance, turnarounds, engineering, industrial cleaning services, and capital construction services. The Storage and Terminal Solutions segment undertakes work related to aboveground crude oil and refined product storage tanks and terminals; engineering, procurement, fabrication, and construction services related to cryogenic and other specialty tanks and terminals for LNG, NGLs, hydrogen, ammonia, propane, butane, liquid nitrogen/liquid oxygen, and liquid petroleum; and provides plant work, truck and rail loading/offloading facilities, and marine structures, as well as storage tank and terminal maintenance and repair. This segment also manufactures and sells precision engineered specialty tank products, including geodesic domes, aluminum internal floating roofs, floating suction and skimmer systems, roof drain systems, and floating roof seals. Matrix Service Company was founded in 1984 and is headquartered in Tulsa, Oklahoma.

About WSP Global

WSP Global Inc. operates as a professional services consulting firm in the United States, Canada, the United Kingdom, Sweden, Australia, and internationally. It advises, plans, designs, and manages projects for rail, transit, aviation, highways, bridges, tunnels, water, maritime, and urban infrastructure for public and private clients, construction contractors, and other partners. The company also provides engineering and consultancy services, such as decarbonization strategies, digital building design to building engineering design, and project management services. In addition, it works with and advises governments and private sector in earth sciences and environmental sustainability to conduct due diligence, permit approvals, regulatory compliance, waste/hazardous materials management, geotechnical and mining engineering, environmental/ social impact assessments, feasibility, and land remediation studies. Further, the company offers energy clients support, including large-scale power plants, renewables clean energy investments, smaller on-site power generation and efficiency programs, energy transmission, storage and distribution from pre-feasibility studies and community engagement through operation and decommissioning; and provides siting and licensing, procurement, construction management, engineering, process design, and productivity analysis to food and beverage, pharmaceutical and biotechnology, aerospace, automotive, technology, and chemicals industries, as well as operation, maintenance, and decommissioning services during the facility’s active life. Additionally, it offers strategic advisory services comprising planning and advisory, management, and technology and sustainability services. The company was formerly known as GENIVAR Inc. and changed its name to WSP Global Inc. in January 2014. WSP Global Inc. was founded in 1885 and is headquartered in Montreal, Canada.