The investment landscape for small-cap energy companies is heating up as analysts compare two notable contenders: Matrix Service Company and North American Construction Group. Both companies offer distinct services within the energy sector, prompting investors to weigh their strengths and weaknesses.
Volatility and Risk Assessment
In terms of stock volatility, Matrix Service has a beta of 1.05, indicating that its stock price is approximately 5% more volatile than the S&P 500. In contrast, North American Construction Group’s beta stands at 1.24, suggesting a volatility of 24% above the benchmark index. This distinction highlights North American Construction Group’s potential for greater price fluctuations, a factor that may concern risk-averse investors.
Earnings and Valuation Comparison
When examining earnings, North American Construction Group outperforms Matrix Service with higher revenues and earnings per share. Despite this, Matrix Service is currently trading at a lower price-to-earnings ratio, making it appear more affordable in terms of valuation. Analysts continue to scrutinize these figures as they assess the future potential of both stocks.
Institutional ownership also plays a vital role in investment confidence. Approximately 78.4% of Matrix Service shares are held by institutional investors, compared to 75.0% for North American Construction Group. Additionally, insider ownership differs significantly, with 4.1% of Matrix Service shares owned by insiders versus 9.7% for North American Construction Group. This data suggests that larger investment entities have a stronger belief in Matrix Service’s long-term growth prospects.
Analyst ratings further illuminate the potential upside for investors. Current consensus estimates indicate a price target of $20.00 for Matrix Service, representing a potential upside of 26.42%. This optimistic outlook from analysts positions Matrix Service as a more favorable option compared to North American Construction Group, which may lack the same level of anticipated growth.
Profitability metrics also reveal discrepancies between the two companies. North American Construction Group outperforms Matrix Service across most profitability measures, including net margins and returns on equity and assets. This dominance in profitability could influence investor decisions as they seek to maximize returns.
Company Overviews
Matrix Service Company, founded in 1984 and headquartered in Tulsa, Oklahoma, provides a range of services to support critical energy infrastructure and industrial markets. Its operations are divided into three segments: Utility and Power Infrastructure, Process and Industrial Facilities, and Storage and Terminal Solutions. The company engages in various activities, including the construction of substations, LNG facilities, and maintenance services for power generation assets.
On the other hand, North American Construction Group Ltd., established in 1953 and based in Acheson, Canada, specializes in mining and heavy civil construction services. It operates across Australia, Canada, and the United States, catering to the resource development and industrial construction sectors. The company offers comprehensive mine management services, heavy equipment rentals, and full-service support for mining operations.
In summary, the competition between Matrix Service and North American Construction Group presents a complex scenario for investors. While North American Construction Group demonstrates stronger earnings and profitability metrics, Matrix Service offers a potentially higher upside at a lower valuation. As investors consider their options, the decision will hinge on individual risk tolerance and growth expectations.
