Argan, Inc. (AGX) vs Legence Corp. (LGN)

Argan, Inc. and Legence Corp. are both Engineering & Construction companies. Argan, Inc. is the larger, with a market value of $3.7B against $2.8B — 1.3× the size. Legence Corp. has negative trailing earnings, so its P/E is not meaningful; Argan, Inc. trades at 20.3×. Argan, Inc. has the higher net margin (15.1% vs −1.20%) and the lower return on invested capital (0.00% vs 1.07%). Across the 17 metrics below, Argan, Inc. leads on 10 and Legence Corp. on 7.

Valuation

Metric AGX LGN Engineering & Construction median
P/E 20.33 n/m 27.65
P/S 3.09 0.52 0.85
P/B 7.24 1.99 3.04
Price to free cash flow 6.72 6.01 19.05
EV/EBITDA 14.29 12.17 11.89
EV/Sales 2.22 0.72 1.20
Earnings yield 4.92% (2.63%) 2.77%
Free cash flow yield 14.88% 16.63% 2.00%

Profitability

Metric AGX LGN Engineering & Construction median
Gross margin 20.86% 18.74% 18.76%
Operating margin 15.36% 0.79% 6.43%
Net margin 15.09% (1.20%) 2.14%
Free cash flow margin 45.93% 8.64% 1.12%
Return on equity 39.85% (7.63%) 6.05%
Return on assets 15.70% (2.41%) 1.19%
Return on invested capital 0.00% 1.07% 2.52%

Growth

Metric AGX LGN Engineering & Construction median
Revenue growth (TTM) 29.02% — 18.09%
EPS growth (last fiscal year) 58.37% — 13.42%
Revenue growth, 5-year CAGR 19.22% — 12.23%
Net income growth, 5-year CAGR 42.01% — 0.00%

Health

Metric AGX LGN Engineering & Construction median
Debt to equity 0.00 1.06 0.41
Current ratio 1.50 1.35 1.37
Net debt to EBITDA (6.55) 2.93 0.38

Dividend

Metric AGX LGN Engineering & Construction median
Dividend yield 0.84% — 0.68%
Payout ratio 0.17 — 0.18

Size

Metric AGX LGN Engineering & Construction median
Market cap 3.66b 2.75b 1.13b

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