EMCOR Group (NYSE:EME) & LGN (NASDAQ:LGN) Critical Review

LGN (NASDAQ:LGN) and EMCOR Group (NYSE:EME) are both industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitability.

Insider and Institutional Ownership

92.6% of EMCOR Group shares are held by institutional investors. 0.0% of LGN shares are held by company insiders. Comparatively, 0.7% of EMCOR Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares LGN and EMCOR Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LGN	-1.20%	4.33%	1.23%
EMCOR Group	7.74%	35.49%	14.12%

Analyst Ratings

This is a summary of current ratings and recommmendations for LGN and EMCOR Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LGN	1	1	10	2	2.93
EMCOR Group	0	0	7	1	3.12

LGN currently has a consensus price target of $99.50, suggesting a potential upside of 76.61%. EMCOR Group has a consensus price target of $1,014.17, suggesting a potential upside of 22.95%. Given LGN’s higher probable upside, equities research analysts plainly believe LGN is more favorable than EMCOR Group.

Earnings and Valuation

This table compares LGN and EMCOR Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LGN	$2.55 billion	2.39	-$59.78 million	$0.40	140.85
EMCOR Group	$18.60 billion	1.96	$1.27 billion	$32.15	25.66

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

Summary

EMCOR Group beats LGN on 9 of the 14 factors compared between the two stocks.

About LGN

Legence Corp. is a provider of engineering, consulting, installation and maintenance services for mission-critical systems in buildings. The company specializes in designing, fabricating and installing complex HVAC, process piping and other mechanical, electrical and plumbing systems. Legence Corp. is based in SAN JOSE, Calif.

About EMCOR Group

EMCOR Group, Inc. provides construction and facilities, building, and industrial services in the United States and the United Kingdom. It offers design, integration, installation, start-up, operation, and maintenance services related to power transmission, distribution, and generation systems; energy solutions; premises electrical and lighting systems; process instrumentation; low-voltage systems; voice and data communications systems; roadway and transit lighting, signaling, and fiber optic lines; computerized traffic control systems, and signal and communication equipment; heating, ventilation, air conditioning, refrigeration, and geothermal solutions; clean-room process ventilation systems; fire protection and suppression systems; plumbing, process, and high-purity piping systems; controls and filtration systems; water and wastewater treatment systems; central plant heating and cooling systems; crane and rigging services; millwright services; and steel fabrication, erection, and welding services. The company also provides building services that covers commercial and government site-based operations and maintenance; facility management, maintenance, and services; energy efficiency retrofit services; military base operations support services; services for indoor air quality; floor care and janitorial services; landscaping, lot sweeping, and snow removal services; vendor management and call center services; installation and support for building systems; program development, management, and maintenance for energy systems; technical consulting and diagnostic services; infrastructure and building projects; modification and retrofit projects; and other building services, including reception, security, and catering services. In addition, it offers refinery turnaround planning and engineering; welding; overhaul and maintenance; instrumentation and electrical; and renewable energy services. The company was incorporated in 1987 and is headquartered in Norwalk, Connecticut.