Financial Contrast: Sterling Infrastructure (NASDAQ:STRL) and Argan (NYSE:AGX)

Argan (NYSE:AGX) and Sterling Infrastructure (NASDAQ:STRL) are both industrials companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, institutional ownership, risk, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current recommendations for Argan and Sterling Infrastructure, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Argan	1	3	5	1	2.60
Sterling Infrastructure	0	2	6	0	2.75

Argan currently has a consensus price target of $509.00, suggesting a potential upside of 47.34%. Sterling Infrastructure has a consensus price target of $733.17, suggesting a potential upside of 77.59%. Given Sterling Infrastructure’s stronger consensus rating and higher possible upside, analysts clearly believe Sterling Infrastructure is more favorable than Argan.

Insider and Institutional Ownership

79.4% of Argan shares are held by institutional investors. Comparatively, 80.9% of Sterling Infrastructure shares are held by institutional investors. 3.0% of Argan shares are held by company insiders. Comparatively, 1.6% of Sterling Infrastructure 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.

Volatility and Risk

Argan has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Sterling Infrastructure has a beta of 1.86, indicating that its stock price is 86% more volatile than the S&P 500.

Valuation and Earnings

This table compares Argan and Sterling Infrastructure”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Argan	$944.61 million	5.13	$137.77 million	$12.64	27.33
Sterling Infrastructure	$2.49 billion	5.07	$290.15 million	$13.87	29.77

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Argan	15.09%	38.51%	14.56%
Sterling Infrastructure	12.55%	40.12%	17.15%

Summary

Sterling Infrastructure beats Argan 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 Sterling Infrastructure

Sterling Infrastructure, Inc. engages in the provision of e-infrastructure, transportation, and building solutions primarily in the United States. It operates through three segments: E-Infrastructure Solutions, Transportation Solutions, and Building Solutions. The E-Infrastructure Solutions segment provides site development services for the blue-chip end users in the e-commerce distribution center, data center, manufacturing, warehousing, and power generation sectors. The Transportation Solutions segment is involved in the development of infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail, and storm drainage systems for the departments of transportation in various states, regional transit authorities, airport authorities, port authorities, water authorities, and railroads. The Building Solutions segment provides residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work for developers and general contractors, as well as provides plumbing services for residential builds. The company was formerly known as Sterling Construction Company, Inc. and changed its name to Sterling Infrastructure, Inc. in June 2022. Sterling Infrastructure, Inc. was founded in 1955 and is headquartered in The Woodlands, Texas.