NYSE:AGX

Stock Analysis Report

Executive Summary

Argan, Inc., through its subsidiaries, provides engineering, procurement, construction, commissioning, operations management, maintenance, project development, technical, and consulting services to the power generation and renewable energy markets.

Rewards

Trading at 57.3% below its fair value

Earnings are forecast to grow 91.72% per year

Risk Analysis

High level of non-cash earnings

Dividend of 2.93% is not well covered by earnings

Highly volatile share price over past 3 months

Profit margins (0.5%) are lower than last year (6.8%)



Snowflake Analysis

Flawless balance sheet with high growth potential.


Similar Companies

Share Price & News

How has Argan's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AGX's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.3%

AGX

-0.8%

US Construction

1.1%

US Market


1 Year Return

-17.2%

AGX

18.3%

US Construction

17.8%

US Market

Return vs Industry: AGX underperformed the US Construction industry which returned 18.3% over the past year.

Return vs Market: AGX underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

AGXIndustryMarket
7 Day-2.3%-0.8%1.1%
30 Day-15.5%-5.4%1.4%
90 Day-20.9%-0.09%3.9%
1 Year-15.2%-17.2%19.3%18.3%20.3%17.8%
3 Year-49.4%-52.2%0.5%-1.7%44.8%35.4%
5 Year19.7%8.9%34.9%30.2%71.3%52.4%

Price Volatility Vs. Market

How volatile is Argan's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Argan undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AGX ($34.1) is trading below our estimate of fair value ($79.92)

Significantly Below Fair Value: AGX is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: AGX is poor value based on its PE Ratio (336.2x) compared to the Construction industry average (17.2x).

PE vs Market: AGX is poor value based on its PE Ratio (336.2x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: AGX is poor value based on its PEG Ratio (3.7x)


Price to Book Ratio

PB vs Industry: AGX is good value based on its PB Ratio (1.5x) compared to the US Construction industry average (1.6x).


Next Steps

Future Growth

How is Argan forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

91.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AGX's forecast earnings growth (91.7% per year) is above the savings rate (1.7%).

Earnings vs Market: AGX's earnings (91.7% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: AGX's revenue (54.5% per year) is forecast to grow faster than the US market (7.4% per year).

High Growth Revenue: AGX's revenue (54.5% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if AGX's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Argan performed over the past 5 years?

4.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AGX has a high level of non-cash earnings.

Growing Profit Margin: AGX's current net profit margins (0.5%) are lower than last year (6.8%).


Past Earnings Growth Analysis

Earnings Trend: AGX's earnings have grown by 4.6% per year over the past 5 years.

Accelerating Growth: AGX's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: AGX had negative earnings growth (-96.6%) over the past year, making it difficult to compare to the Construction industry average (-2.7%).


Return on Equity

High ROE: AGX's Return on Equity (0.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Argan's financial position?


Financial Position Analysis

Short Term Liabilities: AGX's short term assets ($353.1M) exceed its short term liabilities ($58.7M).

Long Term Liabilities: AGX's short term assets ($353.1M) exceed its long term liabilities ($1.9M).


Debt to Equity History and Analysis

Debt Level: AGX is debt free.

Reducing Debt: AGX had no debt 5 years ago.

Debt Coverage: AGX has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: AGX has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: AGX has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if AGX's debt is covered by short term assets.


Next Steps

Dividend

What is Argan's current dividend yield, its reliability and sustainability?

2.93%

Current Dividend Yield


Dividend Yield vs Market

company2.9%marketbottom25%1.4%markettop25%3.7%industryaverage0.9%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: AGX's dividend (2.93%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: AGX's dividend (2.93%) is low compared to the top 25% of dividend payers in the US market (3.67%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, AGX has been paying a dividend for less than 10 years.

Growing Dividend: AGX's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (986%), AGX's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Argan's salary, the management and board of directors tenure and is there insider trading?

9.2yrs

Average board tenure


CEO

Rainer Bosselmann (76yo)

16.2yrs

Tenure

US$1,133,415

Compensation

Mr. Rainer H. Bosselmann has been the Chief Executive Officer and President of Argan, Inc. since October 2003 and has been its Chairman since May 2003. He served as Vice Chairman of the Board of Argan Inc. ...


CEO Compensation Analysis

Compensation vs Market: Rainer's total compensation ($USD1.13M) is below average for companies of similar size in the US market ($USD1.69M).

Compensation vs Earnings: Rainer's compensation has been consistent with company performance over the past year.


Board Age and Tenure

9.2yrs

Average Tenure

66yo

Average Age

Experienced Board: AGX's board of directors are considered experienced (9.2 years average tenure).


Insider Trading

Insider Buying: AGX insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$29,43822 Oct 19
Richard Deily
EntityIndividual
Role
Controller
VP & Corporate Controller
Shares750
Max PriceUS$39.25

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Rainer Bosselmann (76yo)

    Chairman

    • Tenure: 16.2yrs
    • Compensation: US$1.13m
  • Richard Deily (65yo)

    VP & Corporate Controller

    • Tenure: 0yrs
  • David Watson (44yo)

    CFO, Senior VP

    • Tenure: 4.2yrs
    • Compensation: US$947.62k

Board Members

  • Rainer Bosselmann (76yo)

    Chairman

    • Tenure: 16.2yrs
    • Compensation: US$1.13m
  • Bill Leimkuhler (68yo)

    Independent Director

    • Tenure: 12.5yrs
    • Compensation: US$120.00k
  • James Quinn (61yo)

    Lead Independent Director

    • Tenure: 0yrs
    • Compensation: US$114.10k
  • Champ Mitchell (72yo)

    Independent Director

    • Tenure: 16.2yrs
    • Compensation: US$112.60k
  • Peter Getsinger (67yo)

    Independent Director

    • Tenure: 5.1yrs
    • Compensation: US$120.00k
  • Bill Griffin (64yo)

    Director

    • Tenure: 7.7yrs
    • Compensation: US$5.04m
  • Cynthia Flanders (65yo)

    Independent Director

    • Tenure: 10.7yrs
    • Compensation: US$112.90k
  • John Jeffrey (65yo)

    Independent Director

    • Tenure: 2.5yrs
    • Compensation: US$119.70k
  • Mano Koilpillai

    Director

    • Tenure: 0.3yrs

Company Information

Argan, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Argan, Inc.
  • Ticker: AGX
  • Exchange: NYSE
  • Founded: 1961
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: US$533.096m
  • Shares outstanding: 15.63m
  • Website: https://www.arganinc.com

Number of Employees


Location

  • Argan, Inc.
  • One Church Street
  • Suite 201
  • Rockville
  • Maryland
  • 20850
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AGXNYSE (New York Stock Exchange)YesCommon StockUSUSDFeb 1975
1AWDB (Deutsche Boerse AG)YesCommon StockDEEURFeb 1975
0HHOLSE (London Stock Exchange)YesCommon StockGBUSDFeb 1975

Biography

Argan, Inc., through its subsidiaries, provides engineering, procurement, construction, commissioning, operations management, maintenance, project development, technical, and consulting services to the pow ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/11 00:06
End of Day Share Price2019/12/10 00:00
Earnings2019/07/31
Annual Earnings2019/01/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.