Brookfield Business Partners (BBU) versus Argan (AGX) Financial Analysis

Brookfield Business Partners (NYSE: BBU) and Argan (NYSE:AGX) are both business services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Dividends

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Brookfield Business Partners pays an annual dividend of $0.25 per share and has a dividend yield of 0.7%. Argan pays an annual dividend of $1.00 per share and has a dividend yield of 2.7%.

Profitability

This table compares Brookfield Business Partners and Argan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Brookfield Business Partners 0.94% 5.30% 2.10%
Argan 8.07% 21.25% 10.93%

Analyst Ratings

This is a summary of current recommendations for Brookfield Business Partners and Argan, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Brookfield Business Partners 0 0 5 0 3.00
Argan 0 1 1 0 2.50

Brookfield Business Partners currently has a consensus target price of $41.00, indicating a potential upside of 14.49%. Argan has a consensus target price of $56.00, indicating a potential upside of 50.54%. Given Argan’s higher possible upside, analysts plainly believe Argan is more favorable than Brookfield Business Partners.

Institutional & Insider Ownership

65.7% of Brookfield Business Partners shares are owned by institutional investors. Comparatively, 83.9% of Argan shares are owned by institutional investors. 7.6% of Argan shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Brookfield Business Partners and Argan’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Brookfield Business Partners $22.82 billion 0.10 -$58.00 million N/A N/A
Argan $892.82 million 0.65 $72.01 million N/A N/A

Argan has lower revenue, but higher earnings than Brookfield Business Partners.

Risk and Volatility

Brookfield Business Partners has a beta of 1.69, suggesting that its stock price is 69% more volatile than the S&P 500. Comparatively, Argan has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Summary

Argan beats Brookfield Business Partners on 9 of the 14 factors compared between the two stocks.

About Brookfield Business Partners

Brookfield Business Partners L.P. specializes in investments in business services and industrials sector. It seeks returns of at least 15% on its investments. Brookfield Business Partners L.P. is based in Hamilton, Bermuda. Brookfield Business Partners L.P. operates as a subsidiary of Brookfield Asset Management Inc.

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.

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