Financial Analysis: Matrix Service (NASDAQ:MTRX) & Energy Services of America (NASDAQ:ESOA)

Energy Services of America (NASDAQ:ESOA) and Matrix Service (NASDAQ:MTRX) are both industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Analyst Recommendations

This is a summary of recent ratings for Energy Services of America and Matrix Service, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Energy Services of America	0	0	2	0	3.00
Matrix Service	1	0	1	1	2.67

Energy Services of America currently has a consensus price target of $25.00, indicating a potential upside of 114.04%. Matrix Service has a consensus price target of $20.50, indicating a potential upside of 87.90%. Given Energy Services of America’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Energy Services of America is more favorable than Matrix Service.

Profitability

This table compares Energy Services of America and Matrix Service’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Energy Services of America	N/A	N/A	N/A
Matrix Service	-1.77%	-3.60%	-0.81%

Institutional and Insider Ownership

2.1% of Energy Services of America shares are held by institutional investors. Comparatively, 78.4% of Matrix Service shares are held by institutional investors. 44.7% of Energy Services of America shares are held by company insiders. Comparatively, 4.4% of Matrix Service shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Energy Services of America and Matrix Service”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Energy Services of America	$467.37 million	N/A	N/A	$0.18	63.83
Matrix Service	$845.48 million	0.36	-$29.46 million	($0.53)	-20.58

Energy Services of America has higher earnings, but lower revenue than Matrix Service. Matrix Service is trading at a lower price-to-earnings ratio than Energy Services of America, indicating that it is currently the more affordable of the two stocks.

Summary

Energy Services of America beats Matrix Service on 9 of the 12 factors compared between the two stocks.

About Energy Services of America

Energy Services of America Corporation, together with its subsidiaries, provides contracting services for utilities and energy related companies in the United States. The company constructs, replaces, and repairs interstate and intrastate natural gas pipelines and storage facilities for utility companies and private natural gas companies; and provides services relating to pipeline, storage facilities, and plant works. It also offers electrical and mechanical installation, and repair services, including substation and switchyard, site preparation, equipment setting, pipe fabrication and installation, packaged buildings, transformers, and other ancillary works for the gas, petroleum power, chemical, water and sewer, and automotive industries. In addition, the company provides corrosion protection services, horizontal drilling services, liquid pipeline and pump station construction, production facility construction, water and sewer pipeline installation, and various maintenance and repair services, as well as other services related to pipeline construction. Further, it serves customers primarily in West Virginia, Virginia, Ohio, Pennsylvania, and Kentucky. Energy Services of America Corporation was incorporated in 2006 and is based in Huntington, West Virginia.

About Matrix Service

Matrix Service Company provides engineering, fabrication, construction, and maintenance services to support critical energy infrastructure and industrial markets in the United States, Canada, and internationally. It operates through three segments: Utility and Power Infrastructure; Process and Industrial Facilities; and Storage and Terminal Solutions. The Utility and Power Infrastructure segment offers power delivery services, including construction of new substations, upgrades of existing substations, transmission and distribution line installations, and upgrades and maintenance, and emergency and storm restoration services. This segment also provides engineering, fabrication, and construction services for LNG utility peak shaving facilities; and construction and maintenance services to power generation facilities, including natural gas fired facilities. The Process and Industrial Facilities segment engages in the refining and processing of crude oil; fractionating and marketing of natural, gas and natural gas liquids; and offers plant maintenance, turnarounds, engineering, industrial cleaning services, and capital construction services. The Storage and Terminal Solutions segment undertakes work related to aboveground crude oil and refined product storage tanks and terminals; engineering, procurement, fabrication, and construction services related to cryogenic and other specialty tanks and terminals for LNG, NGLs, hydrogen, ammonia, propane, butane, liquid nitrogen/liquid oxygen, and liquid petroleum; and provides plant work, truck and rail loading/offloading facilities, and marine structures, as well as storage tank and terminal maintenance and repair. This segment also manufactures and sells precision engineered specialty tank products, including geodesic domes, aluminum internal floating roofs, floating suction and skimmer systems, roof drain systems, and floating roof seals. Matrix Service Company was founded in 1984 and is headquartered in Tulsa, Oklahoma.