Argan (AGX) versus Layne Christensen (LAYN) Head-To-Head Analysis

Argan (NYSE: AGX) and Layne Christensen (NASDAQ:LAYN) are both small-cap construction companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.

Institutional and Insider Ownership

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83.8% of Argan shares are owned by institutional investors. Comparatively, 95.0% of Layne Christensen shares are owned by institutional investors. 7.6% of Argan shares are owned by company insiders. Comparatively, 12.0% of Layne Christensen shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Argan pays an annual dividend of $1.00 per share and has a dividend yield of 2.7%. Layne Christensen does not pay a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Argan 8.07% 21.25% 10.93%
Layne Christensen -5.74% -25.19% -3.71%

Earnings & Valuation

This table compares Argan and Layne Christensen’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Argan $892.82 million 0.65 $72.01 million N/A N/A
Layne Christensen $475.52 million 0.62 -$27.31 million ($0.72) -20.53

Argan has higher revenue and earnings than Layne Christensen.

Risk and Volatility

Argan has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, Layne Christensen has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Argan and Layne Christensen, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Argan 0 1 1 0 2.50
Layne Christensen 0 1 0 0 2.00

Argan currently has a consensus price target of $56.00, suggesting a potential upside of 48.94%. Layne Christensen has a consensus price target of $15.00, suggesting a potential upside of 1.49%. Given Argan’s stronger consensus rating and higher possible upside, equities analysts clearly believe Argan is more favorable than Layne Christensen.

Summary

Argan beats Layne Christensen on 11 of the 13 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 Layne Christensen

Layne Christensen Company operates as a water management, construction, and drilling company that provides solutions for the water, mineral, and energy markets in the United States and internationally. The company's Water Resources segment offers water-related products and services, including hydrologic design and construction; source of supply exploration; well and intake construction; and well and pump rehabilitation services. This segment also provides water treatment equipment engineering services and systems for the treatment of regulated and nuisance contaminants. Its Inliner segment provides process, sanitary, and storm water rehabilitation solutions to municipalities and industrial customers dealing with aging infrastructure needs, as well as other rehabilitative methods, such as Janssen structural renewal for service lateral connections and mainlines, slip lining, traditional excavation and replacement, and manhole renewal with cementitious and epoxy products. The company's Heavy Civil segment offers water and wastewater treatment plants design and construction, and pipeline installation services; provides surface water intakes, pumping stations, and hard rock tunnels; offers marine construction services; and designs and constructs biogas facilities. Its Mineral Services segment conducts above ground drilling activities comprising core drilling, reverse circulation, dual tube, hammer, and rotary air-blast methods; and provides exploratory and definition drilling services. The company serves government agencies, investor-owned utilities, industrial companies, global mining companies, consulting engineering firms, heavy civil construction contractors, oil and gas companies, power companies, and agribusinesses. The company was formerly known as Layne Inc. and changed its name to Layne Christensen Company in June 1996. Layne Christensen Company was founded in 1882 and is headquartered in The Woodlands, Texas.

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