Head to Head Review: HC2 (NYSE:HCHC) vs. Arcosa (NYSE:ACA)

HC2 (NYSE:HCHC) and Arcosa (NYSE:ACA) are both multi-sector conglomerates companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitability, institutional ownership, valuation and risk.

Valuation & Earnings

This table compares HC2 and Arcosa’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HC2 $1.98 billion 0.06 -$31.50 million $0.09 27.33
Arcosa $1.74 billion 1.26 $113.30 million $2.35 19.28

Arcosa has lower revenue, but higher earnings than HC2. Arcosa is trading at a lower price-to-earnings ratio than HC2, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares HC2 and Arcosa’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HC2 -6.02% -7.09% -0.36%
Arcosa 6.32% 6.86% 5.11%

Institutional & Insider Ownership

41.1% of HC2 shares are held by institutional investors. 30.4% of HC2 shares are held by company insiders. Comparatively, 0.5% of Arcosa shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for HC2 and Arcosa, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HC2 0 0 1 0 3.00
Arcosa 0 1 3 0 2.75

HC2 currently has a consensus target price of $8.50, indicating a potential upside of 245.53%. Arcosa has a consensus target price of $53.00, indicating a potential upside of 17.00%. Given HC2’s stronger consensus rating and higher probable upside, research analysts clearly believe HC2 is more favorable than Arcosa.

Risk and Volatility

HC2 has a beta of 2.09, indicating that its share price is 109% more volatile than the S&P 500. Comparatively, Arcosa has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500.

Summary

Arcosa beats HC2 on 8 of the 14 factors compared between the two stocks.

HC2 Company Profile

HC2 Holdings, Inc. provides construction, marine services, energy, telecommunications, insurance, life sciences, broadcasting, and other services in the United States, the United Kingdom, and internationally. The company models, details, fabricates, and erects structural steel for commercial and industrial, and infrastructure construction projects, including building and office complexes, hotels and casinos, convention centers, sports arenas and stadiums, shopping malls, hospitals, dams, bridges, mines, and power plants. It also fabricates trusses and girders; and fabricates and erects water pipes, water storage tanks, pollution control scrubbers, tunnel liners, pressure vessels, strainers, filters, separators, and various customized products. In addition, the company offers subsea cable installation and maintenance services for the telecommunications sector; installation, maintenance, and repair services for fiber optic communication and power infrastructure to offshore oil and gas platforms; and installation services for inter-array power cables for use in offshore wind farms. Further, it distributes natural gas motor fuels; designs, builds, owns, acquires, operates, and maintains compressed natural gas fueling stations for transportation vehicles; and provides voice communication services for national telecommunications, mobile, prepaid, and voice over Internet protocol service operators, as well as wholesale carriers and Internet service providers. Additionally, the company offers long-term care, life, annuity, and other accident and health coverage; focuses on developing products for early osteoarthritis of the knee, as well as skin lightening technology; and acquires and operates Over-The-Air broadcasting stations and Azteca America, a Spanish-language broadcast network. The company was formerly known as PTGi Holding Inc. and changed its name to HC2 Holdings, Inc. in April 2014. HC2 Holdings, Inc. was founded in 1994 and is headquartered in New York, New York.

Arcosa Company Profile

Arcosa, Inc. manufactures and sells infrastructure-related products and services for the construction, energy, and transportation markets. It operates through three segments: Construction Products Group, Energy Equipment Group, and Transportation Products Group. The Construction Products Group segment offers lightweight and natural construction aggregates, and trench shields and shoring products that are used in construction landscape, including commercial, industrial, road and bridge, and underground construction. It serves concrete producers; commercial, residential, industrial, and highway contractors; manufacturers of masonry products; state and local governments; and equipment rental dealers. The Energy Equipment Group segment provides structural wind towers for wind turbine producers; steel utility structures for electricity transmission and distribution; and pressurized and non-pressurized storage and distribution containers that store and transport various products, such as propane, anhydrous ammonia, and natural gas liquids. The Transportation Products Group segment offers hopper barges, tank barges, fiberglass covers, hatches, castings, and winches for commercial marine transportation companies and industrial shippers; axles, circular forgings, and coupling devices for freight, tank, locomotive, and passenger rail transportation equipment, as well as for other industrial uses; and cast components for use in the industrial and mining sectors. The company is headquartered in Dallas, Texas.

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