Arcosa (NYSE:ACA) and Construction Partners (NASDAQ:ROAD) Critical Comparison

Construction Partners (NASDAQ:ROAD) and Arcosa (NYSE:ACA) are both mid-cap construction companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, risk, dividends, institutional ownership and profitability.

Earnings & Valuation

This table compares Construction Partners and Arcosa”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Construction Partners	$1.82 billion	3.82	$68.93 million	$1.37	90.61
Arcosa	$2.57 billion	1.74	$93.70 million	$1.88	48.59

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

Risk & Volatility

Construction Partners has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Arcosa has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Construction Partners	3.04%	12.24%	3.81%
Arcosa	3.45%	6.25%	3.19%

Institutional and Insider Ownership

94.8% of Construction Partners shares are owned by institutional investors. Comparatively, 90.7% of Arcosa shares are owned by institutional investors. 16.4% of Construction Partners shares are owned by insiders. Comparatively, 1.2% of Arcosa shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings for Construction Partners and Arcosa, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Construction Partners	0	2	1	2	3.00
Arcosa	0	1	3	0	2.75

Construction Partners presently has a consensus price target of $112.33, suggesting a potential downside of 9.50%. Arcosa has a consensus price target of $112.00, suggesting a potential upside of 22.62%. Given Arcosa’s higher probable upside, analysts clearly believe Arcosa is more favorable than Construction Partners.

Summary

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

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.

About Arcosa

Arcosa, Inc., together with its subsidiaries, provides infrastructure-related products and solutions for the construction, engineered structures, and transportation markets in the United States. It operates through three segments: Construction Products, Engineered Structures, and Transportation Products. The Construction Products segment offers natural and recycled aggregates; specialty materials; and construction site support equipment, including trench shields and shoring products for residential and non-residential construction, and specialty/other products, as well as for infrastructure construction. The Engineered Structures segment offers utility structures, wind towers, traffic structures, and telecommunication structures for electricity transmission and distribution, wind power generation, highway road construction, and wireless communication markets. The Transportation Products segment offers inland barges, fiberglass barge covers, winches, marine hardware, and steel components for railcars and transportation equipment; cast components for industrial and mining sectors; and axles, circular forgings, and coupling devices for freight, tank, locomotive, and passenger rail transportation equipment, as well as other industrial uses. Arcosa, Inc. was incorporated in 2018 and is headquartered in Dallas, Texas.