Primoris Services (NYSE:PRIM) vs. Construction Partners (NASDAQ:ROAD) Critical Review
by Mitch Edgeman · The Markets DailyPrimoris Services (NYSE:PRIM – Get Free Report) and Construction Partners (NASDAQ:ROAD – Get Free Report) are both mid-cap industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.
Profitability
This table compares Primoris Services and Construction Partners’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Primoris Services | 1.92% | 9.96% | 3.67% |
| Construction Partners | 4.10% | 16.06% | 4.59% |
Earnings & Valuation
This table compares Primoris Services and Construction Partners”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Primoris Services | $7.57 billion | 0.52 | $274.90 million | $2.55 | 28.66 |
| Construction Partners | $2.81 billion | 1.67 | $101.78 million | $2.55 | 32.44 |
Primoris Services has higher revenue and earnings than Construction Partners. Primoris Services is trading at a lower price-to-earnings ratio than Construction Partners, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Primoris Services and Construction Partners, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Primoris Services | 0 | 7 | 10 | 0 | 2.59 |
| Construction Partners | 0 | 4 | 3 | 1 | 2.62 |
Primoris Services presently has a consensus target price of $123.47, suggesting a potential upside of 68.96%. Construction Partners has a consensus target price of $132.67, suggesting a potential upside of 60.40%. Given Primoris Services’ higher probable upside, equities analysts clearly believe Primoris Services is more favorable than Construction Partners.
Institutional & Insider Ownership
91.8% of Primoris Services shares are held by institutional investors. Comparatively, 94.8% of Construction Partners shares are held by institutional investors. 1.1% of Primoris Services shares are held by company insiders. Comparatively, 15.7% of Construction Partners shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Volatility & Risk
Primoris Services has a beta of 1.44, suggesting that its stock price is 44% more volatile than the S&P 500. Comparatively, Construction Partners has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.
Summary
Construction Partners beats Primoris Services on 9 of the 14 factors compared between the two stocks.
About Primoris Services
Primoris Services Corporation, a specialty contractor company, provides a range of construction, fabrication, maintenance, replacement, and engineering services in the United States and Canada. It operates through three segments: Utilities, Energy/Renewables, and Pipeline Services. The Utilities segment offers installation and maintenance services for new and existing natural gas distribution systems, electric utility distribution and transmission systems, and communications systems. The Energy/Renewables segment provides a range of services, including engineering, procurement, and construction, as well as retrofits, highway and bridge construction, demolition, site work, soil stabilization, mass excavation, flood control, upgrades, repairs, outages, and maintenance services to renewable energy and energy storage, renewable fuels, petroleum, refining, and petrochemical industries, as well as state departments of transportation. The Pipeline Services segment offers a range of services comprising pipeline construction, maintenance, facility, and integrity services; installation of compressor and pump stations; and metering facilities for entities in the petroleum and petrochemical industries, as well as gas, water, and sewer utilities. The company was founded in 1960 and is headquartered in Dallas, Texas.
About Construction Partners
Construction Partners, Inc., a civil infrastructure company, constructs and maintains roadways in Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee. The company provides various products and services to public and private infrastructure projects, such as highways, roads, bridges, airports, and commercial and residential developments. It also engages in manufacturing and distributing hot mix asphalt (HMA) for internal use and sales to third parties in connection with construction projects; and paving activities, including the construction of roadway base layers and application of asphalt pavement. In addition, the company is involved in site development, including the installation of utility and drainage systems; mining aggregates, such as sand, gravel, and construction stones that are used as raw materials in the production of HMA; and distributing liquid asphalt cement for internal use and sales to third parties in connection with HMA production. The company was formerly known as SunTx CPI Growth Company, Inc. and changed its name to Construction Partners, Inc. in September 2017. Construction Partners, Inc. was founded in 2007 and is headquartered in Dothan, Alabama.