Comparing Argan (AGX) & Emcor Group (EME)
Argan (NYSE: AGX) and Emcor Group (NYSE:EME) are both construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, valuation, risk, analyst recommendations and dividends.
Argan pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Emcor Group pays an annual dividend of $0.32 per share and has a dividend yield of 0.4%. Argan pays out 18.5% of its earnings in the form of a dividend. Emcor Group pays out 8.9% 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.
Volatility and Risk
Argan has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, Emcor Group has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.
This is a summary of current recommendations and price targets for Argan and Emcor Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Argan currently has a consensus target price of $56.00, suggesting a potential upside of 22.40%. Emcor Group has a consensus target price of $80.50, suggesting a potential downside of 4.33%. Given Argan’s higher probable upside, research analysts plainly believe Argan is more favorable than Emcor Group.
Institutional & Insider Ownership
87.6% of Argan shares are held by institutional investors. Comparatively, 94.1% of Emcor Group shares are held by institutional investors. 9.5% of Argan shares are held by insiders. Comparatively, 2.0% of Emcor Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares Argan and Emcor Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Argan||$675.05 million||1.05||$70.32 million||$5.41||8.46|
|Emcor Group||$7.55 billion||0.66||$181.93 million||$3.58||23.50|
Emcor Group has higher revenue and earnings than Argan. Argan is trading at a lower price-to-earnings ratio than Emcor Group, indicating that it is currently the more affordable of the two stocks.
This table compares Argan and Emcor Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Argan, Inc. is a holding company. The Company conducts operations through its subsidiaries, Gemma Power Systems, LLC and affiliates (GPS), Atlantic Projects Company Limited (APC), Southern Maryland Cable, Inc. (SMC) and The Roberts Company (Roberts). Through GPS and APC, the Company’s power industry services segment provides engineering, procurement, construction, commissioning, operations management, maintenance, development, technical and consulting services to the power generation and renewable energy markets. Through SMC, the telecommunications infrastructure services segment of the Company provides project management, construction, installation and maintenance services to commercial, local government and federal government customers. Through Roberts, the Company’s industrial fabrication and field services segment produces, delivers and installs fabricated steel components specializing in pressure vessels and heat exchangers for industrial plants.
About Emcor Group
EMCOR Group, Inc. is an electrical and mechanical construction, and facilities services firm in the United States. The Company provides building services and industrial services. Its segments are United States electrical construction and facilities services; United States mechanical construction and facilities services; United States building services; United States industrial services, and United Kingdom building services. As of December 31, 2016, its services were provided to a range of commercial, industrial, utility and institutional customers through approximately 75 operating subsidiaries and joint venture entities. It is providing construction services relating to electrical and mechanical systems in various types of non-residential and certain residential facilities, and in providing services relating to the operation, maintenance and management of facilities, including refineries and petrochemical plants. It operates various electrical and mechanical systems.
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