Critical Review: ENGlobal (ENG) vs. Tetra Tech (TTEK)

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ENGlobal (NASDAQ:ENG) and Tetra Tech (NASDAQ:TTEK) are both construction companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, dividends, institutional ownership, valuation, profitability and analyst recommendations.

Dividends

Tetra Tech pays an annual dividend of $0.48 per share and has a dividend yield of 0.7%. ENGlobal does not pay a dividend. Tetra Tech pays out 18.2% of its earnings in the form of a dividend. Tetra Tech has increased its dividend for 3 consecutive years.

Profitability

This table compares ENGlobal and Tetra Tech’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ENGlobal -30.67% -25.83% -19.18%
Tetra Tech 4.62% 15.91% 7.38%

Analyst Recommendations

This is a breakdown of current ratings and target prices for ENGlobal and Tetra Tech, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ENGlobal 0 0 0 0 N/A
Tetra Tech 0 2 4 0 2.67

Tetra Tech has a consensus price target of $70.17, indicating a potential upside of 2.00%. Given Tetra Tech’s higher probable upside, analysts plainly believe Tetra Tech is more favorable than ENGlobal.

Institutional and Insider Ownership

13.9% of ENGlobal shares are owned by institutional investors. Comparatively, 84.9% of Tetra Tech shares are owned by institutional investors. 37.7% of ENGlobal shares are owned by insiders. Comparatively, 3.4% of Tetra Tech shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares ENGlobal and Tetra Tech’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ENGlobal $55.76 million 0.43 -$16.25 million N/A N/A
Tetra Tech $2.96 billion 1.28 $117.87 million $2.64 26.06

Tetra Tech has higher revenue and earnings than ENGlobal.

Risk and Volatility

ENGlobal has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500. Comparatively, Tetra Tech has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.

Summary

Tetra Tech beats ENGlobal on 11 of the 14 factors compared between the two stocks.

About ENGlobal

ENGlobal Corporation provides engineering and professional services primarily to the energy industry in the United States and internationally. The company operates through two segments, Engineering, Procurement and Construction Management (EPCM); and Automation. The EPCM segment offers services relating to the development, management, and execution of projects requiring professional engineering and related project management services primarily to the energy industry, which include conceptual studies, project definition, cost estimating, engineering design, environmental compliance, material procurement, project management, and construction management. The Automation segment provides services related to the design, fabrication, and implementation of process distributed control and analyzer systems, advanced automated data gathering systems, information technology, and electrical projects; and designs, assembles, integrates, and services control and instrumentation systems for applications in the energy and processing related industries. It serves petroleum refining, petrochemical, pipeline, production, process, and pulp and paper industries. In addition, this segment offers electrical and instrument installation, technical, maintenance and calibration, and repair services to government agencies, refineries, and petrochemical and process industries. ENGlobal Corporation was founded in 1985 and is headquartered in Houston, Texas.

About Tetra Tech

Tetra Tech, Inc. provides consulting and engineering services worldwide. It operates through two segments, Water, Environment and Infrastructure (WEI); and Resource Management and Energy (RME). The WEI segment offers early data collection and monitoring, data analysis and information technology, science and engineering applied research, engineering design, construction management, and operations and maintenance services; and climate change and energy management consulting, as well as greenhouse gas inventory assessment, certification, reduction, and management services. It serves governments, and commercial and industrial clients in water resources analysis and water management, environmental restoration, government consulting, and civil infrastructure master planning and engineering design markets. The RME segment provides early data collection and monitoring, data analysis and information technology, feasibility studies and assessments, science and engineering applied research, engineering design, construction management, and operations and maintenance services. This segment serves industrial and commercial clients, U.S. federal agencies in large scale remediation, and international development agencies in natural resources, energy, remediation, waste management, utilities, and international development markets. Tetra Tech, Inc. was founded in 1966 and is headquartered in Pasadena, California.

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