Financial Survey: James Hardie Industries (NYSE:JHX) versus Argan (NYSE:AGX)

James Hardie Industries (NYSE:JHX) and Argan (NYSE:AGX) are both construction companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, valuation, profitability, institutional ownership, dividends and analyst recommendations.

Volatility and Risk

James Hardie Industries has a beta of 1.8, indicating that its stock price is 80% more volatile than the S&P 500. Comparatively, Argan has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500.

Insider and Institutional Ownership

8.0% of James Hardie Industries shares are owned by institutional investors. Comparatively, 79.4% of Argan shares are owned by institutional investors. 6.7% of Argan shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares James Hardie Industries and Argan’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
James Hardie Industries	2.70%	13.52%	5.81%
Argan	13.11%	31.38%	13.47%

Analyst Ratings

This is a summary of recent ratings and recommmendations for James Hardie Industries and Argan, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
James Hardie Industries	0	4	12	0	2.75
Argan	0	5	3	0	2.38

James Hardie Industries currently has a consensus target price of $26.71, suggesting a potential upside of 6.69%. Argan has a consensus target price of $355.20, suggesting a potential downside of 19.61%. Given James Hardie Industries’ stronger consensus rating and higher probable upside, equities research analysts clearly believe James Hardie Industries is more favorable than Argan.

Earnings and Valuation

This table compares James Hardie Industries and Argan”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
James Hardie Industries	$3.88 billion	2.77	$424.00 million	$0.27	92.70
Argan	$874.18 million	7.01	$85.46 million	$8.49	52.05

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

About James Hardie Industries

James Hardie Industries plc manufactures and sells fiber cement, fiber gypsum, and cement bonded building products for interior and exterior building construction applications primarily in the United States, Australia, Europe, New Zealand, and the Philippines. The company operates through North America Fiber Cement, Asia Pacific Fiber Cement, and Europe Building Products segments. It offers fiber cement interior linings, exterior siding products, and related accessories; and various fiber cement products for a range of applications, including external cladding, internal walls, ceilings, floors, soffits, fences, and facades. The company also provides fiber gypsum and cement-bonded boards for use in the timber frame construction, dry lining, DIY, and structural fire protection applications. Its products are used in residential repair and remodel, and commercial and residential new construction markets James Hardie Industries plc was founded in 1888 and is based in Dublin, Ireland.

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.