Argan (AGX) vs. Chicago Bridge & Iron (CBI) Critical Survey
Argan (NYSE: AGX) and Chicago Bridge & Iron (NYSE:CBI) are both small-cap industrials companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, valuation, risk and profitability.
Insider and Institutional Ownership
84.9% of Argan shares are held by institutional investors. Comparatively, 71.0% of Chicago Bridge & Iron shares are held by institutional investors. 7.6% of Argan shares are held by company insiders. Comparatively, 1.1% of Chicago Bridge & Iron shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
This table compares Argan and Chicago Bridge & Iron’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Argan||$675.05 million||1.05||$70.32 million||$5.39||8.49|
|Chicago Bridge & Iron||$10.68 billion||0.18||-$313.16 million||($9.62)||-1.98|
Argan has higher earnings, but lower revenue than Chicago Bridge & Iron. Chicago Bridge & Iron is trading at a lower price-to-earnings ratio than Argan, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Argan has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Chicago Bridge & Iron has a beta of 2.22, suggesting that its share price is 122% more volatile than the S&P 500.
Argan pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Chicago Bridge & Iron pays an annual dividend of $0.14 per share and has a dividend yield of 0.7%. Argan pays out 18.6% of its earnings in the form of a dividend. Chicago Bridge & Iron pays out -1.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
This is a breakdown of recent ratings and target prices for Argan and Chicago Bridge & Iron, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Chicago Bridge & Iron||1||11||2||0||2.07|
Argan currently has a consensus price target of $56.00, indicating a potential upside of 22.40%. Chicago Bridge & Iron has a consensus price target of $19.62, indicating a potential upside of 3.18%. Given Argan’s higher possible upside, analysts clearly believe Argan is more favorable than Chicago Bridge & Iron.
This table compares Argan and Chicago Bridge & Iron’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Chicago Bridge & Iron||-13.33%||-10.86%||-2.04%|
Argan beats Chicago Bridge & Iron on 11 of the 16 factors compared between the two stocks.
Argan, Inc. is a holding company. The Company conducts operations through its subsidiaries, Gemma Power Systems, LLC and affiliates (GPS), Atlantic Projects Company Limited (APC), Southern Maryland Cable, Inc. (SMC) and The Roberts Company (Roberts). Through GPS and APC, the Company’s power industry services segment provides engineering, procurement, construction, commissioning, operations management, maintenance, development, technical and consulting services to the power generation and renewable energy markets. Through SMC, the telecommunications infrastructure services segment of the Company provides project management, construction, installation and maintenance services to commercial, local government and federal government customers. Through Roberts, the Company’s industrial fabrication and field services segment produces, delivers and installs fabricated steel components specializing in pressure vessels and heat exchangers for industrial plants.
About Chicago Bridge & Iron
Chicago Bridge & Iron Company N.V. provides services to customers in energy infrastructure market. The Company provides services, such as conceptual design, technology, engineering, procurement, fabrication, modularization, construction, commissioning, maintenance, program management and environmental services. Its Engineering and Construction segment provides engineering, procurement, and construction (EPC) services. Its Fabrication Services segment provides fabrication and erection of steel plate structures; fabrication of piping systems and process modules, and manufacturing and distribution of pipe and fittings. The Technology segment provides process technology licenses and associated engineering services, and catalysts, for petrochemical and refining industries, and offers process planning and project development services.
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