Critical Survey: Argan (AGX) versus Foster Wheeler (FWLT)

Argan (NYSE: AGX) and Foster Wheeler (NASDAQ:FWLT) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, dividends and risk.

Dividends

Argan pays an annual dividend of $1.00 per share and has a dividend yield of 2.2%. Foster Wheeler does not pay a dividend. Argan pays out 18.6% of its earnings in the form of a dividend.

Profitability

This table compares Argan and Foster Wheeler’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%
Foster Wheeler N/A N/A N/A

Earnings and Valuation

This table compares Argan and Foster Wheeler’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 1.04 $70.32 million $5.39 8.37
Foster Wheeler N/A N/A N/A $0.90 N/A

Argan has higher revenue and earnings than Foster Wheeler. Foster Wheeler is trading at a lower price-to-earnings ratio than Argan, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

84.9% of Argan shares are owned by institutional investors. 9.5% of Argan shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Argan and Foster Wheeler, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Argan 0 2 0 0 2.00
Foster Wheeler 0 0 0 0 N/A

Argan currently has a consensus target price of $56.00, indicating a potential upside of 24.17%.

Summary

Argan beats Foster Wheeler on 8 of the 9 factors compared between the two stocks.

About Argan

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 Foster Wheeler

Foster Wheeler AG (Foster Wheeler) is a supplier of engineering, construction and project management contractor and power equipment. It operates through two business groups: Global Engineering and Construction Group (Global E&C Group), and Global Power Group. Its Global E&C Group, which operates worldwide, designs, engineers and constructs onshore and offshore upstream oil and gas processing facilities, natural gas liquefaction facilities and receiving terminals, gas-to-liquids facilities, oil refining, chemical and petrochemical, pharmaceutical and biotechnology facilities and related infrastructure. Its Global Power Group designs, manufactures and erects steam generators and auxiliary equipment for electric power generating stations, district heating and power plants and industrial facilities worldwide.In May 2014, the Company announced that a subsidiary of its Global Power Group acquired Siemens Environmental Systems and Services business.

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