Critical Analysis: TSS (NASDAQ:TSSI) and KBR (NYSE:KBR)

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

Institutional & Insider Ownership

97.0% of KBR shares are held by institutional investors. 18.9% of TSS shares are held by insiders. Comparatively, 1.1% of KBR shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares TSS and KBR’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TSS	2.08%	21.81%	3.79%
KBR	4.71%	35.14%	7.63%

Analyst Recommendations

This is a summary of recent recommendations and price targets for TSS and KBR, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TSS	0	1	1	0	2.50
KBR	0	6	5	0	2.45

TSS currently has a consensus price target of $17.75, indicating a potential upside of 118.06%. KBR has a consensus price target of $57.00, indicating a potential upside of 37.97%. Given TSS’s stronger consensus rating and higher possible upside, analysts clearly believe TSS is more favorable than KBR.

Volatility and Risk

TSS has a beta of 2.07, suggesting that its stock price is 107% more volatile than the S&P 500. Comparatively, KBR has a beta of 0.51, suggesting that its stock price is 49% less volatile than the S&P 500.

Earnings & Valuation

This table compares TSS and KBR”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TSS	$148.00 million	1.59	$5.98 million	$0.20	40.70
KBR	$7.74 billion	0.68	$375.00 million	$2.91	14.20

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

Summary

KBR beats TSS on 8 of the 14 factors compared between the two stocks.

About TSS

TSS, Inc. offers planning, design, engineering, construction management, commissioning and maintenance services. It provides these services primarily for specialized facilities such as data centers, communications rooms, call centers, laboratories, trading floors, network operations centers, medical facilities and similar environments. TSS Inc., formerly known as Fortress International Group, Inc., is based in Columbia, United States.

About KBR

KBR, Inc. provides scientific, technology, and engineering solutions to governments and commercial customers worldwide. It operates through Government Solutions and Sustainable Technology Solutions segments. The Government Solutions segment offers life-cycle support solutions to defense, intelligence, space, aviation, and other programs and missions for military and other government agencies in the United States, the United Kingdom, and Australia. Its services cover research and development, advanced prototyping, acquisition support, systems engineering, cyber analytics, space domain awareness, test and evaluation, systems integration and program management, global supply chain management, and operations readiness and support, as well as command, control, communications, computers, intelligence, surveillance, and reconnaissance services. This segment also provides various professional advisory services to the defense, renewable energy, and critical infrastructure sectors. The Sustainable Technology Solutions segment operates portfolio of various proprietary process technologies for ammonia/syngas, chemical/petrochemicals, clean refining, and circular process/circular economy solutions. This segment also provides synergistic services, including advisory and consulting focused on broad-based energy transition and net-zero carbon emission solutions; high-end engineering, design and program management centered around decarbonization, energy efficiency, environmental impact and asset optimization; and digitally-enabled operating and monitoring solutions. KBR, Inc. was founded in 1901 and is headquartered in Houston, Texas.