Legence Corp. (LGN) vs Construction Partners, Inc. (ROAD)

Legence Corp. and Construction Partners, Inc. 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; Construction Partners, Inc. trades at 36.5×. Construction Partners, Inc. has the higher net margin (4.10% vs −1.20%) and the higher return on invested capital (6.82% vs 1.07%). Across the 17 metrics below, Legence Corp. leads on 9 and Construction Partners, Inc. on 8.

Valuation

Metric LGN ROAD Engineering & Construction median
P/E n/m 36.46 28.59
P/S 1.07 1.51 1.15
P/B 4.08 5.03 3.96
Price to free cash flow 12.34 25.37 25.24
EV/EBITDA 21.44 14.55 14.87
EV/Sales 1.26 1.99 1.42
Earnings yield (1.28%) 2.74% 2.47%
Free cash flow yield 8.10% 3.94% 1.91%

Profitability

Metric LGN ROAD Engineering & Construction median
Gross margin 18.74% 15.76% 18.76%
Operating margin 0.79% 8.57% 6.26%
Net margin (1.20%) 4.10% 2.23%
Free cash flow margin 8.64% 5.94% 1.83%
Return on equity (7.63%) 15.05% 7.90%
Return on assets (2.41%) 4.36% 0.87%
Return on invested capital 1.07% 6.82% 2.52%

Growth

Metric LGN ROAD Engineering & Construction median
Revenue growth (TTM) — 41.92% 16.67%
EPS growth (last fiscal year) — 40.46% —
Revenue growth, 5-year CAGR — 29.05% 11.76%
Net income growth, 5-year CAGR — 20.36% 0.00%

Health

Metric LGN ROAD Engineering & Construction median
Debt to equity 1.06 1.72 0.40
Current ratio 1.35 1.57 1.39
Net debt to EBITDA 2.93 3.86 0.38

Dividend

Metric LGN ROAD Engineering & Construction median
Dividend yield — — 0.65%
Payout ratio — 0.00 0.00

Size

Metric LGN ROAD Engineering & Construction median
Market cap 5.67b 5.10b 1.31b

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