Critical Comparison: LGN (NASDAQ:LGN) & Dycom Industries (NYSE:DY)

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

Institutional & Insider Ownership

98.3% of Dycom Industries shares are held by institutional investors. 0.0% of LGN shares are held by company insiders. Comparatively, 1.2% of Dycom Industries shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares LGN and Dycom Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
LGN	-1.20%	4.33%	1.23%
Dycom Industries	4.79%	25.30%	8.39%

Valuation & Earnings

This table compares LGN and Dycom Industries”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LGN	$2.55 billion	2.39	-$59.78 million	$0.40	140.85
Dycom Industries	$6.88 billion	1.27	$281.19 million	$10.99	26.46

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

Analyst Recommendations

This is a summary of recent ratings and price targets for LGN and Dycom Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LGN	1	1	10	2	2.93
Dycom Industries	0	2	10	0	2.83

LGN presently has a consensus target price of $99.50, indicating a potential upside of 76.61%. Dycom Industries has a consensus target price of $502.92, indicating a potential upside of 72.97%. Given LGN’s stronger consensus rating and higher possible upside, research analysts clearly believe LGN is more favorable than Dycom Industries.

Summary

Dycom Industries beats LGN on 8 of the 13 factors compared between the two stocks.

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.

About Dycom Industries

Dycom Industries, Inc. provides specialty contracting services to the telecommunications infrastructure and utility industries in the United States. The company offers engineering services to telecommunications providers, including the planning and design of aerial, underground, and buried fiber optic, copper, and coaxial cable systems; wireless networks in connection with the deployment of macro cell and new small cell sites; and program and project management and inspection personnel. It also provides construction, maintenance, and installation services for telephone companies and cable multiple system operators, such as placement and splicing of copper, fiber, and coaxial cables; tower construction, lines and antenna installation, foundation and equipment pad construction, and small cell site placement for wireless carriers, as well as equipment installation and material fabrication, and site testing services; underground facility locating services comprising locating telephone, cable television, power, water, sewer, and gas lines; installation and maintenance of customer premise equipment, including digital video recorders, set top boxes, and modems for cable system operators; and construction and maintenance services for electric and gas utilities, and other customers. Dycom Industries, Inc. was incorporated in 1969 and is headquartered in Palm Beach Gardens, Florida.