Comparing Argan (NYSE:AGX) and Knife River (NYSE:KNF)

Argan (NYSE:AGX) and Knife River (NYSE:KNF) are both mid-cap construction companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares Argan and Knife River’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Argan	11.00%	29.61%	12.82%
Knife River	6.18%	12.83%	6.17%

Valuation and Earnings

This table compares Argan and Knife River”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Argan	$874.18 million	3.72	$85.46 million	$7.13	33.43
Knife River	$2.90 billion	1.59	$201.68 million	$3.17	25.74

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Argan and Knife River, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Argan	0	3	1	0	2.25
Knife River	0	0	6	0	3.00

Argan currently has a consensus target price of $202.00, indicating a potential downside of 15.25%. Knife River has a consensus target price of $114.17, indicating a potential upside of 39.90%. Given Knife River’s stronger consensus rating and higher probable upside, analysts plainly believe Knife River is more favorable than Argan.

Institutional & Insider Ownership

79.4% of Argan shares are owned by institutional investors. Comparatively, 80.1% of Knife River shares are owned by institutional investors. 6.7% of Argan shares are owned by insiders. Comparatively, 0.3% of Knife River shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Argan has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Knife River has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

About Argan

Argan, Inc., through its subsidiaries, provides engineering, procurement, construction, commissioning, maintenance, project development, and technical consulting services to the power generation market. The company operates through Power Services, Industrial Services, and Telecom Services segments. The Power Services segment offers engineering, procurement, and construction, as well as designing, building, and commissioning of large-scale energy projects to the owners of alternative energy facilities, such as biomass plants, wind farms, and solar fields; and design, construction, project management, start-up, and operation services for projects with approximately 18 gigawatts of power-generating capacity. This segment serves independent power project owners, public utilities, power plant equipment suppliers, and other commercial firms. The Industrial Services segment provides industrial construction and field services and vessel fabrication services for fertilizer, engineering and construction, forest products, and various other industrial companies in southeast region of the United States. The Telecom Services segment offers trenchless directional boring and excavation for underground communication and power networks, as well as aerial cabling services; and installs buried cable, high and low voltage electric lines, and private area outdoor lighting systems. It also provides structured cabling, terminations, and connectivity that offers the physical transport for high-speed data, voice, video, and security networks. This segment serves electricity cooperative, state and local government agencies, counties and municipalities, and technology-oriented government contracting firms, as well as federal government facilities in the mid-Atlantic region of the United States. Argan, Inc. was incorporated in 1961 and is headquartered in Rockville, Maryland.

About Knife River

Knife River Corporation, together with its subsidiaries, provides aggregates- led construction materials and contracting services in the United States. It operates through Pacific, Northwest, Mountain, Central, and Energy Services segments. The company mines, processes, and sells construction aggregates, including crushed stone and sand, and gravel; and produces and sells asphalt and ready-mix concrete. It also provides contracting service, such as heavy-civil construction, asphalt and concrete paving, and site development and grading. In addition, the company sells cement, merchandise, and other building materials and related services. The company sells its construction materials to public and private-sector customers, including federal, state, and municipal governments, as well as industrial, commercial and residential developers, and other private parties; and provides its contracting services to public-sector customers for the development and servicing of highways, local roads, bridges, and other public-infrastructure projects. Knife River Corporation was founded in 1917 and is based in Bismarck, North Dakota.