At around $7 per share, Great Lakes is worth around $435 million on the market. It is valued at 11 times EV/EBITDA. Compared to peers, including Orion Marine Group and Willbros Group, Great Lakes is the biggest company. Willbros, trading at nearly $9 per share, has a total market cap of $420 million. The market values Willbros at 9 times EV/EBITDA. The smallest company among the three is Orion Marine, which is worth only $272 million on the market. However, Orion has the highest EV multiple at 33 times EV/EBITDA.
None of these three companies generate high profitability. Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) had more than 2.25% operating margin in 2012 while the operating margin of Willbros is only 1.4%. Orion is the least profitable company with a -4.8% operating margin. Neither Willbros nor Orion Marine pay any dividends to shareholders, while Great Lakes offers its shareholders a dividend yield of 0.9%.
The Foolish bottom line
With its fluctuating free cash flow, small profitability and low dividend yield, I personally do not think that investors should consider Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) as a long-term investment. If investors want to speculate on its ups and downs in the market, they should dig deeper to find a possible near-term catalyst for this stock.
The article Is This Company a Buy After an 18% Drop? originally appeared on Fool.com and is written by Anh Hoang.
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