Analyzing Chicago Bridge & Iron (CBI) & Layne Christensen (LAYN)

Chicago Bridge & Iron (NYSE: CBI) and Layne Christensen (NASDAQ:LAYN) are both small-cap construction companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Analyst Ratings

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This is a breakdown of recent ratings and recommmendations for Chicago Bridge & Iron and Layne Christensen, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chicago Bridge & Iron 1 10 3 0 2.14
Layne Christensen 0 1 0 0 2.00

Chicago Bridge & Iron presently has a consensus target price of $17.29, suggesting a potential upside of 14.86%. Layne Christensen has a consensus target price of $15.00, suggesting a potential downside of 0.33%. Given Chicago Bridge & Iron’s stronger consensus rating and higher possible upside, research analysts clearly believe Chicago Bridge & Iron is more favorable than Layne Christensen.

Institutional & Insider Ownership

63.7% of Chicago Bridge & Iron shares are owned by institutional investors. Comparatively, 95.0% of Layne Christensen shares are owned by institutional investors. 1.1% of Chicago Bridge & Iron shares are owned by insiders. Comparatively, 12.0% of Layne Christensen shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Chicago Bridge & Iron and Layne Christensen’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chicago Bridge & Iron -20.60% -17.65% -2.69%
Layne Christensen -5.74% -25.19% -3.71%

Risk and Volatility

Chicago Bridge & Iron has a beta of 2.44, suggesting that its share price is 144% more volatile than the S&P 500. Comparatively, Layne Christensen has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500.

Dividends

Chicago Bridge & Iron pays an annual dividend of $0.07 per share and has a dividend yield of 0.5%. Layne Christensen does not pay a dividend. Chicago Bridge & Iron pays out -3.8% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Chicago Bridge & Iron and Layne Christensen’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Chicago Bridge & Iron $6.67 billion 0.23 -$1.46 billion ($1.86) -8.09
Layne Christensen $475.52 million 0.63 -$27.31 million ($0.72) -20.90

Layne Christensen has lower revenue, but higher earnings than Chicago Bridge & Iron. Layne Christensen is trading at a lower price-to-earnings ratio than Chicago Bridge & Iron, indicating that it is currently the more affordable of the two stocks.

Summary

Chicago Bridge & Iron beats Layne Christensen on 9 of the 15 factors compared between the two stocks.

About Chicago Bridge & Iron

Chicago Bridge & Iron Company N.V. provides services to customers in energy infrastructure market. The Company provides services, such as conceptual design, technology, engineering, procurement, fabrication, modularization, construction, commissioning, maintenance, program management and environmental services. Its Engineering and Construction segment provides engineering, procurement, and construction (EPC) services. Its Fabrication Services segment provides fabrication and erection of steel plate structures; fabrication of piping systems and process modules, and manufacturing and distribution of pipe and fittings. The Technology segment provides process technology licenses and associated engineering services, and catalysts, for petrochemical and refining industries, and offers process planning and project development services.

About Layne Christensen

Layne Christensen Company operates as a water management, construction, and drilling company that provides solutions for the water, mineral, and energy markets in the United States and internationally. The company's Water Resources segment offers water-related products and services, including hydrologic design and construction; source of supply exploration; well and intake construction; and well and pump rehabilitation services. This segment also provides water treatment equipment engineering services and systems for the treatment of regulated and nuisance contaminants. Its Inliner segment provides process, sanitary, and storm water rehabilitation solutions to municipalities and industrial customers dealing with aging infrastructure needs, as well as other rehabilitative methods, such as Janssen structural renewal for service lateral connections and mainlines, slip lining, traditional excavation and replacement, and manhole renewal with cementitious and epoxy products. The company's Heavy Civil segment offers water and wastewater treatment plants design and construction, and pipeline installation services; provides surface water intakes, pumping stations, and hard rock tunnels; offers marine construction services; and designs and constructs biogas facilities. Its Mineral Services segment conducts above ground drilling activities comprising core drilling, reverse circulation, dual tube, hammer, and rotary air-blast methods; and provides exploratory and definition drilling services. The company serves government agencies, investor-owned utilities, industrial companies, global mining companies, consulting engineering firms, heavy civil construction contractors, oil and gas companies, power companies, and agribusinesses. The company was formerly known as Layne Inc. and changed its name to Layne Christensen Company in June 1996. Layne Christensen Company was founded in 1882 and is headquartered in The Woodlands, Texas.

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