Critical Survey: Argan (NYSE:AGX) versus Hillman Solutions (NASDAQ:HLMN)

Argan (NYSE:AGX) and Hillman Solutions (NASDAQ:HLMN) are both construction companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.

Valuation and Earnings

This table compares Argan and Hillman Solutions”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Argan	$944.61 million	10.48	$137.77 million	$11.38	62.07
Hillman Solutions	$1.55 billion	1.03	$40.31 million	$0.19	42.74

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

Profitability

This table compares Argan and Hillman Solutions’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Argan	15.48%	36.89%	14.64%
Hillman Solutions	2.30%	9.15%	4.71%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Argan and Hillman Solutions, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Argan	0	3	4	1	2.75
Hillman Solutions	1	1	3	0	2.40

Argan presently has a consensus target price of $470.40, indicating a potential downside of 33.40%. Hillman Solutions has a consensus target price of $12.25, indicating a potential upside of 50.86%. Given Hillman Solutions’ higher probable upside, analysts plainly believe Hillman Solutions is more favorable than Argan.

Insider and Institutional Ownership

79.4% of Argan shares are held by institutional investors. Comparatively, 98.1% of Hillman Solutions shares are held by institutional investors. 6.7% of Argan shares are held by insiders. Comparatively, 4.9% of Hillman Solutions shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Argan has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, Hillman Solutions has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500.

Summary

Argan beats Hillman Solutions on 11 of the 15 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 Hillman Solutions

Founded in 1964 and headquartered in Cincinnati, Ohio, Hillman is a leading North American provider of complete hardware solutions, delivered with industry best customer service to over 40,000 locations. Hillman designs innovative product and merchandising solutions for complex categories that deliver an outstanding customer experience to home improvement centers, mass merchants, national and regional hardware stores, pet supply stores, and OEM & Industrial customers. Leveraging a world-class distribution and sales network, Hillman delivers a “small business” experience with “big business” efficiency.