Argan (NYSE:AGX) & CRH (NYSE:CRH) Head to Head Analysis

Argan (NYSE:AGX) and CRH (NYSE:CRH) are both construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, analyst recommendations, risk, institutional ownership and dividends.

Institutional and Insider Ownership

79.4% of Argan shares are held by institutional investors. Comparatively, 62.5% of CRH shares are held by institutional investors. 6.7% of Argan shares are held by company insiders. Comparatively, 0.1% of CRH shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Argan and CRH’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Argan	14.59%	33.62%	14.09%
CRH	10.02%	15.98%	6.78%

Risk and Volatility

Argan has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500. Comparatively, CRH has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.

Valuation and Earnings

This table compares Argan and CRH”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Argan	$944.61 million	8.70	$137.77 million	$9.74	60.49
CRH	$37.45 billion	2.03	$3.73 billion	$5.52	20.64

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

Dividends

Argan pays an annual dividend of $2.00 per share and has a dividend yield of 0.3%. CRH pays an annual dividend of $1.56 per share and has a dividend yield of 1.4%. Argan pays out 20.5% of its earnings in the form of a dividend. CRH pays out 28.3% 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. Argan has increased its dividend for 2 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings for Argan and CRH, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Argan	0	4	4	1	2.67
CRH	0	3	14	2	2.95

Argan currently has a consensus price target of $425.40, suggesting a potential downside of 27.80%. CRH has a consensus price target of $137.86, suggesting a potential upside of 21.02%. Given CRH’s stronger consensus rating and higher possible upside, analysts plainly believe CRH is more favorable than Argan.

Summary

Argan beats CRH on 10 of the 18 factors compared between the two stocks.

About Argan

Argan, Inc., through its subsidiaries, provides engineering, procurement, construction, commissioning, maintenance, project development, and technical consulting services to the power generation market. The company operates through Power Services, Industrial Services, and Telecom Services segments. The Power Services segment offers engineering, procurement, and construction, as well as designing, building, and commissioning of large-scale energy projects to the owners of alternative energy facilities, such as biomass plants, wind farms, and solar fields; and design, construction, project management, start-up, and operation services for projects with approximately 18 gigawatts of power-generating capacity. This segment serves independent power project owners, public utilities, power plant equipment suppliers, and other commercial firms. The Industrial Services segment provides industrial construction and field services and vessel fabrication services for fertilizer, engineering and construction, forest products, and various other industrial companies in southeast region of the United States. The Telecom Services segment offers trenchless directional boring and excavation for underground communication and power networks, as well as aerial cabling services; and installs buried cable, high and low voltage electric lines, and private area outdoor lighting systems. It also provides structured cabling, terminations, and connectivity that offers the physical transport for high-speed data, voice, video, and security networks. This segment serves electricity cooperative, state and local government agencies, counties and municipalities, and technology-oriented government contracting firms, as well as federal government facilities in the mid-Atlantic region of the United States. Argan, Inc. was incorporated in 1961 and is headquartered in Rockville, Maryland.

About CRH

CRH plc, together with its subsidiaries, provides building materials solutions in Ireland and internationally. It operates through four segments: Americas Materials Solutions, Americas Building Solutions, Europe Materials Solutions, and Europe Building Solutions. The company provides solutions for the construction and maintenance of public infrastructure and commercial and residential buildings; and produces and sells aggregates, cement, readymixed concrete, and asphalt, as well as provides paving and construction services. It also manufactures, supplies, and delivers solutions for the built environment in communities across North America; and offers building and infrastructure solutions serving complex critical utility infrastructure, such as water, energy, transportation, and telecommunications projects, and outdoor living solutions for enhancing private and public spaces. In addition, the company combines materials, products, and services to produce a wide range of architectural and infrastructural solutions for use in the building and renovation of critical utility infrastructure, commercial and residential buildings, and outdoor living spaces for the built environment. Further, it produces and supplies precast and pre-stressed concrete products comprising floor and wall elements, beams, vaults, pipes, and manholes; granite, limestone, and sandstone; concrete and polymer-based products, such as underground vaults, drainage systems, utility enclosures, and modular precast structures; engineered steel, polymer-based anchoring, fixing, and connecting solutions; concrete masonry, hardscape and related products, including pavers, blocks and curbs, retaining walls, and slabs; and fencing and railing systems, composite decking, lawn and garden products, and packaged concrete mixes. The company was founded in 1936 and is headquartered in Dublin, Ireland.