Financial Review: Ferrovial (NASDAQ:FER) and Granite Construction (NYSE:GVA)

Granite Construction (NYSE:GVA) and Ferrovial (NASDAQ:FER) are both construction companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, institutional ownership, risk and dividends.

Institutional & Insider Ownership

22.3% of Ferrovial shares are owned by institutional investors. 0.8% of Granite Construction shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Granite Construction and Ferrovial, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Granite Construction	1	0	1	0	2.00
Ferrovial	0	1	2	0	2.67

Granite Construction presently has a consensus target price of $67.00, suggesting a potential downside of 22.67%. Ferrovial has a consensus target price of $48.00, suggesting a potential upside of 8.23%. Given Ferrovial’s stronger consensus rating and higher possible upside, analysts plainly believe Ferrovial is more favorable than Granite Construction.

Dividends

Granite Construction pays an annual dividend of $0.52 per share and has a dividend yield of 0.6%. Ferrovial pays an annual dividend of $0.96 per share and has a dividend yield of 2.2%. Granite Construction pays out 23.9% of its earnings in the form of a dividend.

Profitability

This table compares Granite Construction and Ferrovial’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Granite Construction	2.80%	19.04%	6.82%
Ferrovial	N/A	N/A	N/A

Earnings and Valuation

This table compares Granite Construction and Ferrovial”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Granite Construction	$3.51 billion	1.08	$43.60 million	$2.18	39.74
Ferrovial	N/A	N/A	N/A	N/A	N/A

Granite Construction has higher revenue and earnings than Ferrovial.

Summary

Ferrovial beats Granite Construction on 6 of the 11 factors compared between the two stocks.

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 Ferrovial

Ferrovial SE, together with its subsidiaries, engages in the design, construction, financing, operation, and maintenance of transport infrastructure and urban services internationally. It operates through four segments: Construction, Toll Roads, Airports, and Energy Infrastructures and Mobility. The company designs and executes various public and private works, including the construction of public infrastructure; and develops, finances, and operates toll roads. It also develops, finances, and operates airports; and develops, finances, and operates power transmission lines and renewable energy generation plants, as well as offers mobility and waste management plants and services to the mining industry in Chile. In addition, the company promotes, constructs, and operates energy generation and transmission infrastructures. The company was founded in 1952 and is based in Amsterdam, the Netherlands.