Hitachi (OTCMKTS: HTHIY) and Granite Construction (NYSE:GVA) are both multi-sector conglomerates companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, dividends, institutional ownership and risk.

Risk and Volatility

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Hitachi has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, Granite Construction has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Hitachi and Granite Construction, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hitachi 0 0 0 0 N/A
Granite Construction 0 1 5 0 2.83

Granite Construction has a consensus price target of $72.00, suggesting a potential upside of 27.50%. Given Granite Construction’s higher probable upside, analysts plainly believe Granite Construction is more favorable than Hitachi.

Dividends

Hitachi pays an annual dividend of $0.51 per share and has a dividend yield of 0.7%. Granite Construction pays an annual dividend of $0.52 per share and has a dividend yield of 0.9%. Hitachi pays out 11.6% of its earnings in the form of a dividend. Granite Construction pays out 32.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Profitability

This table compares Hitachi and Granite Construction’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hitachi 3.19% 7.15% 3.08%
Granite Construction 2.31% 6.97% 3.58%

Institutional and Insider Ownership

0.3% of Hitachi shares are owned by institutional investors. Comparatively, 96.1% of Granite Construction shares are owned by institutional investors. 1.3% of Granite Construction shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Hitachi and Granite Construction’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hitachi $81.81 billion 0.43 $2.15 billion $4.41 16.38
Granite Construction $2.99 billion 0.75 $69.09 million $1.62 34.86

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

Summary

Granite Construction beats Hitachi on 9 of the 15 factors compared between the two stocks.

About Hitachi

Hitachi, Ltd. provides information and telecommunication systems, social infrastructure and industrial systems, electronic systems and equipment, construction machinery, high functional materials and components, automotive systems, smart life and ecofriendly systems, other products, and financial services worldwide. The company's Information & Telecommunication Systems segment offers systems integration, consulting, and cloud services; and servers, storage products, software, telecommunications and network equipment, and ATMs. Its Social Infrastructure & Industrial Systems segment provides industrial machinery and plants, elevators, escalators, and railway systems; and thermal, nuclear, and renewable energy power generation systems, and transmission and distribution systems. The company's Electronic Systems & Equipment segment offers semiconductor processing equipment, test and measurement equipment, industrial products, medical electronics equipment, and power tools. Its Construction Machinery segment provides hydraulic excavators, wheel loaders, and mining machinery. The company's High Functional Materials & Components segment offers semiconductor and display related materials, circuit boards and materials, automotive parts, energy storage devices, specialty steels, magnetic materials and components, casting components and materials, and wires and cables. Its Automotive Systems segment provides engine management, electric power train, drive control, and car information systems. The company's Smart Life & Ecofriendly Systems segment offers air-conditioning equipment, room air conditioners, refrigerators, and washing machines. Its Others segment provides optical disk drives, property management, and others. The company's Financial Services segment offers leasing and loan guarantee services. Hitachi, Ltd. has collaboration with the University of Utah Health. The company was founded in 1910 and is headquartered in Tokyo, Japan.

About Granite Construction

Granite Construction Incorporated operates as a heavy civil contractor and a construction materials producer in the United States. The company operates through three segments: Construction, Large Project Construction, and Construction Materials. The Construction segment undertakes various civil construction projects focusing on new construction and improvement of streets, roads, highways, bridges, site work, underground, power-related facilities, water-related facilities, utilities, and other infrastructure projects. It serves customers in the public sector, including certain federal agencies, state departments of transportation, county and city public works departments, school districts and developers, utilities, and private owners of industrial, commercial, and residential sites. The Large Project Construction segment focuses on large, complex infrastructure projects, including highways, mass transit facilities, bridges, tunnels, waterway locks and dams, pipelines, canals, power-related facilities, water-related facilities, utilities, and airport infrastructure. It also undertakes primarily bid-build, design-build, and construction management/general contractor contracts, together with various contract methods relating to public-private partnerships. The Construction Materials segment mines and processes aggregates; and produces and sells construction materials, primarily asphalt, to contractors, landscapers, manufacturers of products requiring aggregate materials, retailers, homeowners, farmers, and brokers. The company also performs site preparation and infrastructure services for residential development, energy development, commercial and industrial sites, and other facilities; and provides construction management professional services. Granite Construction Incorporated was founded in 1922 and is headquartered in Watsonville, California.

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