Reviewing Argan (NYSE:AGX) & Latham Group (NASDAQ:SWIM)

Latham Group (NASDAQ:SWIM) and Argan (NYSE:AGX) are both construction companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Profitability

This table compares Latham Group and Argan’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Latham Group	-2.07%	-2.80%	-1.34%
Argan	13.11%	31.38%	13.47%

Risk and Volatility

Latham Group has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500. Comparatively, Argan has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.

Insider and Institutional Ownership

84.0% of Latham Group shares are held by institutional investors. Comparatively, 79.4% of Argan shares are held by institutional investors. 8.6% of Latham Group shares are held by insiders. Comparatively, 6.7% of Argan shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for Latham Group and Argan, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Latham Group	2	1	0	0	1.33
Argan	0	4	3	1	2.63

Latham Group currently has a consensus target price of $7.44, suggesting a potential upside of 11.01%. Argan has a consensus target price of $355.20, suggesting a potential upside of 11.74%. Given Argan’s stronger consensus rating and higher possible upside, analysts plainly believe Argan is more favorable than Latham Group.

Valuation and Earnings

This table compares Latham Group and Argan”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Latham Group	$508.52 million	1.54	-$17.86 million	($0.10)	-67.00
Argan	$874.18 million	5.04	$85.46 million	$8.49	37.44

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

Summary

Argan beats Latham Group on 12 of the 15 factors compared between the two stocks.

About Latham Group

Latham Group, Inc. designs, manufactures, and markets in-ground residential swimming pools in North America, Australia, and New Zealand. It offers a portfolio of pools and related products, including in-ground swimming pools that include fiber glass and packaged pools; and pool covers and liners under the Latham, Narellan, CoverStar, Radiant, and GLI brand names. The company was formerly known as Latham Topco, Inc. and changed its name to Latham Group, Inc. in March 2021. Latham Group, Inc. was founded in 1956 and is headquartered in Latham, New York.

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.