Analyzing Sterling Infrastructure (NASDAQ:STRL) & LGN (NASDAQ:LGN)

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

Institutional and Insider Ownership

80.9% of Sterling Infrastructure shares are owned by institutional investors. 0.0% of LGN shares are owned by insiders. Comparatively, 1.6% of Sterling Infrastructure shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
LGN	-1.20%	4.33%	1.23%
Sterling Infrastructure	12.55%	40.12%	17.15%

Analyst Recommendations

This is a breakdown of current ratings and price targets for LGN and Sterling Infrastructure, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
LGN	1	1	10	2	2.93
Sterling Infrastructure	0	2	6	0	2.75

LGN currently has a consensus price target of $100.42, indicating a potential upside of 121.67%. Sterling Infrastructure has a consensus price target of $733.17, indicating a potential upside of 64.30%. Given LGN’s stronger consensus rating and higher possible upside, equities research analysts plainly believe LGN is more favorable than Sterling Infrastructure.

Earnings & Valuation

This table compares LGN and Sterling Infrastructure”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
LGN	$2.55 billion	1.92	-$59.78 million	$0.40	113.25
Sterling Infrastructure	$2.49 billion	5.48	$290.15 million	$13.87	32.17

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

Summary

Sterling Infrastructure 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 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.