Financial Contrast: TopBuild (BLD) and Argan (AGX)

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

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Argan 0 1 1 0 2.50
TopBuild 1 1 3 0 2.40

Argan currently has a consensus price target of $56.00, suggesting a potential upside of 29.78%. TopBuild has a consensus price target of $74.00, suggesting a potential downside of 4.77%. Given Argan’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Argan is more favorable than TopBuild.

Institutional and Insider Ownership

83.8% of Argan shares are held by institutional investors. Comparatively, 94.7% of TopBuild shares are held by institutional investors. 9.5% of Argan shares are held by company insiders. Comparatively, 1.3% of TopBuild shares are held by company 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 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, TopBuild has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Argan 9.18% 26.24% 12.66%
TopBuild 8.30% 10.65% 5.87%

Dividends

Argan pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. TopBuild does not pay a dividend.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Argan $675.05 million 0.99 $70.32 million N/A N/A
TopBuild $1.91 billion 1.45 $158.13 million $2.78 27.95

TopBuild has higher revenue and earnings than Argan.

Summary

Argan beats TopBuild on 8 of the 14 factors compared between the two stocks.

About Argan

Argan, Inc., through its subsidiaries, provides engineering, procurement, construction, commissioning, operations management, maintenance, development, technical, and consulting services to the power generation and renewable energy markets. The company's Power Industry Services segment offers engineering, procurement, and construction contracting services to the owners of alternative energy facilities, such as biomass plants, wind farms, and solar fields; and design, construction, start-up, and operation services for approximately 76 facilities with approximately 14,500 megawatts of power-generating capacity. This segment serves independent power project owners, public utilities, power plant equipment suppliers, and global energy plant construction firms. Its Industrial Fabrication and Field Services segment provides industrial steel fabrication and construction services to light and heavy industrial organizations that comprise forest products, mining, and large fertilizer companies in the southern United States. The company's Telecommunications Infrastructure Services segment offers outside plant cabling services, including trench-less 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 offers inside premises wiring services consisting of structuring, cabling, terminations, and connectivity that provide the physical transport for high speed data, voice, video, and security networks. This segment serves state and local government agencies, regional communications service providers, electric utilities, other commercial customers, and federal government facilities, including cleared facilities in the mid-Atlantic region. Argan, Inc. was founded in 1961 and is headquartered in Rockville, Maryland.

About TopBuild

TopBuild Corp. engages in the installation, distribution, and sale of insulation and other building products to the United States construction industry. The company operates in two segments, Installation and Distribution. It offers rain gutters, garage doors, fireplaces, fireproofing and firestopping products, shower enclosures, closet shelves, accessories, and other building products; and residential insulation services. The company also provides various services and tools that are designed to assist builders in applying the principles of building science to new home construction, which includes pre-construction plan reviews, various inspection services, and diagnostic testing; and home energy rating services. It serves single-family homebuilders, local/single-family custom builders, multi-family builders, commercial general contractors, remodelers, and individual homeowners, as well as insulation contractors, gutter contractors, weatherization contractors, other contractors, dealers, metal building erectors, and modular home builders. TopBuild Corp. has approximately 175 installation branches located in 41 states, and 70 distribution centers in 32 states. The company was formerly known as Masco SpinCo Corp. and changed its name to TopBuild Corp. in March 2015. TopBuild Corp. was incorporated in 2015 and is headquartered in Daytona Beach, Florida.

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