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Tetra Tech (TTEK) versus Arcadis (ARCAY) Critical Review – Fairfield Current


Tetra Tech (NASDAQ:TTEK) and Arcadis (OTCMKTS:ARCAY) are both industrial products companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, risk, valuation, profitability, earnings, analyst recommendations and institutional ownership.

Earnings and Valuation

This table compares Tetra Tech and Arcadis’ top-line revenue, earnings per share and valuation.

Gross RevenuePrice/Sales RatioNet IncomeEarnings Per SharePrice/Earnings Ratio
Tetra Tech$2.96 billion1.04$136.88 million$2.6421.06
Arcadis$3.64 billion0.29$80.02 millionN/AN/A

Tetra Tech has higher earnings, but lower revenue than Arcadis.

Insider and Institutional Ownership

84.6% of Tetra Tech shares are owned by institutional investors. 3.4% of Tetra Tech shares are owned by company insiders. Comparatively, 1.0% of Arcadis shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Tetra Tech and Arcadis’ net margins, return on equity and return on assets.

Net MarginsReturn on EquityReturn on Assets
Tetra Tech4.62%15.80%7.44%
ArcadisN/AN/AN/A

Analyst Recommendations

This is a breakdown of current ratings and price targets for Tetra Tech and Arcadis, as provided by MarketBeat.com.

Sell RatingsHold RatingsBuy RatingsStrong Buy RatingsRating Score
Tetra Tech02402.67
Arcadis0000N/A

Tetra Tech presently has a consensus price target of $72.67, suggesting a potential upside of 30.72%. Given Tetra Tech’s higher possible upside, analysts plainly believe Tetra Tech is more favorable than Arcadis.

Risk & Volatility

Tetra Tech has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, Arcadis has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500.

Dividends

Tetra Tech pays an annual dividend of $0.48 per share and has a dividend yield of 0.9%. Arcadis pays an annual dividend of $0.48 per share and has a dividend yield of 3.9%. Tetra Tech pays out 18.2% of its earnings in the form of a dividend. Tetra Tech has raised its dividend for 3 consecutive years.

Summary

Tetra Tech beats Arcadis on 11 of the 14 factors compared between the two stocks.

About Tetra Tech

Tetra Tech, Inc. provides consulting and engineering services worldwide. It operates through two segments, Water, Environment and Infrastructure (WEI); and Resource Management and Energy (RME). The WEI segment offers early data collection and monitoring, data analysis and information technology, science and engineering applied research, engineering design, construction management, and operations and maintenance services; and climate change and energy management consulting, as well as greenhouse gas inventory assessment, certification, reduction, and management services. It serves governments, and commercial and industrial clients in water resources analysis and water management, environmental restoration, government consulting, and civil infrastructure master planning and engineering design markets. The RME segment provides early data collection and monitoring, data analysis and information technology, feasibility studies and assessments, science and engineering applied research, engineering design, construction management, and operations and maintenance services. This segment serves industrial and commercial clients, U.S. federal agencies in large scale remediation, and international development agencies in natural resources, energy, remediation, waste management, utilities, and international development markets. Tetra Tech, Inc. was founded in 1966 and is headquartered in Pasadena, California.

About Arcadis

Arcadis NV operates as a design and consultancy firm for natural and built assets worldwide. The company operates through Europe & Middle East, the Americas, Asia Pacific, and CallisonRTKL segments. It offers design, consultancy, engineering, project, and management services for various sectors. The company provides architectural design, landscape architecture, and performance driven architecture services; business advisory services for asset strategy and performance, business transformation and resiliency, investment and finance, and technology and information; and construction management and site supervision, cost management, program management, and project management services. It also offers contract solutions for claims preparation and defense, dispute avoidance and resolution, expert witness, and strategic procurement and contract advice; cost and commercial management, strategic procurement and contract strategy, and whole lifecycle costing services; civil and structural engineering, asset management, electrical engineering, building information modelling, mechanical engineering, and tunneling and underground infrastructure services; and environmental solutions, such as site evaluation and restoration, strategic environmental consulting, environmental construction, and environmental planning services. In addition, the company provides sustainable urban development, transportation planning, and urban planning services; and water supply and treatment, water management, and industrial water treatment services. It serves natural resources, power, retail, transportation, water and utilities, public, and other industrial sectors, as well as cities, commercial developers, contractors, and financial institutions. The company was formerly known as Heidemij NV and changed its name to Arcadis N.V. in October 1997. Arcadis NV was founded in 1888 and is headquartered in Amsterdam, the Netherlands.

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