Comparing Argan (NYSE:AGX) and INNOVATE (NYSE:VATE)

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

Insider and Institutional Ownership

34.3% of INNOVATE shares are held by institutional investors. Comparatively, 79.4% of Argan shares are held by institutional investors. 57.7% of INNOVATE shares are held by company insiders. Comparatively, 3.0% of Argan shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares INNOVATE and Argan”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
INNOVATE	$1.25 billion	0.06	-$60.60 million	($1.87)	-2.74
Argan	$1.19 billion	3.59	$137.77 million	$12.64	24.07

Argan has lower revenue, but higher earnings than INNOVATE. INNOVATE 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 INNOVATE and Argan’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
INNOVATE	-1.48%	N/A	-2.35%
Argan	15.09%	38.51%	14.56%

Risk & Volatility

INNOVATE has a beta of 2.57, indicating that its share price is 157% more volatile than the S&P 500. Comparatively, Argan has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for INNOVATE and Argan, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
INNOVATE	1	0	0	0	1.00
Argan	1	4	3	1	2.44

Argan has a consensus target price of $544.00, suggesting a potential upside of 78.81%. Given Argan’s stronger consensus rating and higher possible upside, analysts clearly believe Argan is more favorable than INNOVATE.

Summary

Argan beats INNOVATE on 11 of the 14 factors compared between the two stocks.

About INNOVATE

INNOVATE Corp. (NYSE: VATE) is a diversified holding company focused primarily on infrastructure and life sciences businesses. Through its subsidiaries, the company operates businesses involved in structural steel fabrication, industrial construction, engineering and related infrastructure services, as well as the development and commercialization of medical technologies. Its infrastructure operations are centered on DBM Global, a provider of structural steel and related services for commercial, industrial, institutional and infrastructure projects.

About Argan

Argan, Inc. is a construction and engineering company focused primarily on power generation and related infrastructure. Through its subsidiaries, the company provides services that include engineering, procurement, construction, commissioning, and maintenance. Its Gemma Power Systems subsidiary develops and builds power plants, including natural gas-fired and renewable energy facilities. Atlantic Projects Company provides construction, commissioning, and maintenance services for power generation and industrial facilities, while SMC Infrastructure Solutions serves the electric utility sector with infrastructure construction services.