Critical Comparison: LGN (NASDAQ:LGN) vs. IES (NASDAQ:IESC)

IES (NASDAQ:IESC) and LGN (NASDAQ:LGN) are both mid-cap industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Insider and Institutional Ownership

86.6% of IES shares are owned by institutional investors. 56.4% of IES shares are owned by company insiders. Comparatively, 0.0% of LGN shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for IES and LGN, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
IES	0	2	1	0	2.33
LGN	1	2	10	1	2.79

IES presently has a consensus target price of $334.50, suggesting a potential upside of 111.11%. LGN has a consensus target price of $96.67, suggesting a potential upside of 246.35%. Given LGN’s stronger consensus rating and higher possible upside, analysts plainly believe LGN is more favorable than IES.

Volatility & Risk

IES has a beta of 1.86, indicating that its share price is 86% more volatile than the S&P 500. Comparatively, LGN has a beta of 3.42, indicating that its share price is 242% more volatile than the S&P 500.

Profitability

This table compares IES and LGN’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
IES	11.40%	35.70%	19.68%
LGN	-1.20%	4.33%	1.23%

Valuation & Earnings

This table compares IES and LGN”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
IES	$3.37 billion	1.87	$303.06 million	$11.26	14.07
LGN	$2.55 billion	1.18	-$59.78 million	$0.40	69.77

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

Summary

IES beats LGN on 9 of the 14 factors compared between the two stocks.

About IES

IES Holdings, Inc. engages in the design and installation of integrated electrical and technology systems, and provides infrastructure products and services in the United States. The Communications segment designs, installs, and maintains network infrastructure within data centers for co-location and managed hosting customers; corporate, educational, financial, hospitality, and healthcare buildings; e-commerce distribution centers; and high-tech manufacturing facilities. This segment also provides design and installation services for audio/visual, telephone, fire, and wireless access and intrusion alarm systems; and engages in designing/building, servicing, and maintaining data network systems. The Residential segment offers electrical installations to single-family housing and multi-family apartments; and cable television installations to residential and light commercial applications, as well as installs residential solar power for new construction and existing residences. The Infrastructure Solutions segment maintains and repairs alternating and direct current electric motors and generators, and power generating and distribution equipment; manufactures custom-engineered metal enclosed bus duct solutions used in power distribution; manufactures custom commercial and industrial generator enclosures; manufactures, re-manufactures, and repairs industrial lifting magnets; and maintains and repairs railroad main and auxiliary generators, main alternators, and traction motors. The Commercial & Industrial segment offers electrical and mechanical design, construction, and maintenance services for office buildings, manufacturing facilities, data centers, chemical plants, refineries, wind farms, solar facilities, municipal infrastructures, and health care facilities. The company was formerly known as Integrated Electrical Services, Inc. and changed its name to IES Holdings, Inc. in May 2016. IES Holdings, Inc. was incorporated in 1997 and is headquartered in Houston, Texas.

About LGN

Legence Corp. is a provider of engineering, consulting, installation and maintenance services for mission-critical systems in buildings. The company specializes in designing, fabricating and installing complex HVAC, process piping and other mechanical, electrical and plumbing systems. Legence Corp. is based in SAN JOSE, Calif.