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

Argan, Inc. and Legence Corp. are both Engineering & Construction companies. Legence Corp. is the larger, with a market value of $5.7B against $5.1B — 1.1× the size. Legence Corp. has negative trailing earnings, so its P/E is not meaningful; Argan, Inc. trades at 28.3×. 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 12 and Legence Corp. on 5.

Valuation

Metric AGX LGN Engineering & Construction median
P/E 28.33 n/m 28.59
P/S 4.30 1.07 1.15
P/B 10.08 4.08 3.96
Price to free cash flow 9.36 12.34 25.24
EV/EBITDA 22.10 21.44 14.87
EV/Sales 3.44 1.26 1.42
Earnings yield 3.53% (1.28%) 2.47%
Free cash flow yield 10.68% 8.10% 1.91%

Profitability

Metric AGX LGN Engineering & Construction median
Gross margin 20.86% 18.74% 18.76%
Operating margin 15.36% 0.79% 6.26%
Net margin 15.09% (1.20%) 2.23%
Free cash flow margin 45.93% 8.64% 1.83%
Return on equity 39.85% (7.63%) 7.90%
Return on assets 15.70% (2.41%) 0.87%
Return on invested capital 0.00% 1.07% 2.52%

Growth

Metric AGX LGN Engineering & Construction median
Revenue growth (TTM) 29.02% — 16.67%
EPS growth (last fiscal year) 58.37% — —
Revenue growth, 5-year CAGR 13.15% — 11.76%
Net income growth, 5-year CAGR 29.22% — 0.00%

Health

Metric AGX LGN Engineering & Construction median
Debt to equity 0.00 1.06 0.40
Current ratio 1.50 1.35 1.39
Net debt to EBITDA (6.55) 2.93 0.38

Dividend

Metric AGX LGN Engineering & Construction median
Dividend yield 2.40% — 0.65%
Payout ratio 0.38 — 0.00

Size

Metric AGX LGN Engineering & Construction median
Market cap 5.12b 5.67b 1.31b

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