Contrasting Argan (AGX) & Real Goods Solar (RGSE)

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

Analyst Recommendations

This is a breakdown of current ratings for Argan and Real Goods Solar, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Argan 0 1 1 0 2.50
Real Goods Solar 0 0 0 0 N/A

Argan currently has a consensus target price of $56.00, suggesting a potential upside of 45.08%. Given Argan’s higher possible upside, research analysts plainly believe Argan is more favorable than Real Goods Solar.

Dividends

Argan pays an annual dividend of $1.00 per share and has a dividend yield of 2.6%. Real Goods Solar does not pay a dividend.

Valuation and Earnings

This table compares Argan and Real Goods Solar’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Argan $892.82 million 0.67 $72.01 million N/A N/A
Real Goods Solar $15.17 million 0.63 -$17.70 million N/A N/A

Argan has higher revenue and earnings than Real Goods Solar.

Institutional and Insider Ownership

84.3% of Argan shares are owned by institutional investors. Comparatively, 2.4% of Real Goods Solar shares are owned by institutional investors. 9.5% of Argan shares are owned by insiders. Comparatively, 0.2% of Real Goods Solar shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Argan and Real Goods Solar’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%
Real Goods Solar -116.57% -151.80% -92.91%

Volatility and Risk

Argan has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Real Goods Solar has a beta of 1.89, suggesting that its stock price is 89% more volatile than the S&P 500.

Summary

Argan beats Real Goods Solar on 11 of the 12 factors compared between the two stocks.

Argan Company Profile

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, project management, start-up, and operation services for 44 projects with approximately 15,000 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 field services to light and heavy industrial organizations that comprise forest products, power, large fertilizer, and mining and petrochemical companies in southern region of the 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.

Real Goods Solar Company Profile

Real Goods Solar, Inc. operates as a residential and small business commercial solar energy engineering, procurement, and construction company in the United States. The company's Residential segment installs solar energy systems for homeowners, including lease financing, as well as small business commercial services in the continental U.S. Its Sunetric segment installs solar energy systems for homeowners and business owners in Hawaii. The company offers solar energy services, including design, procurement, permitting, build-out, grid connection, financing referrals, and warranty. It installs residential solar energy systems up to 24 kilowatts (kW) in size; and small commercial solar energy systems up to 500 kW in size for various industries, such as retail, manufacturing, service, and municipal services. The company markets its products and services through an outside sales team, inside sales, e-sales, customer referral programs, and alliances and channel partnerships, as well as an online direct marketing channel. Real Goods Solar, Inc. was founded in 1978 and is headquartered in Denver, Colorado.

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