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Argan vs. Primoris Services: Which Stock Offers More Growth Potential?

The United States power-infrastructure spending cycle is growing strong, creating several opportunities for firms operating in the public infrastructure market like Argan, Inc. AGX and Primoris Services Corporation PRIM.

Argan is a Virginia-based engineering and construction company which is more specialized in large power-generation projects. Meanwhile, Primoris Services is a Texas-based specialty infrastructure contractor with broader exposure across utilities, renewables, pipelines and energy infrastructure.

Let’s closely compare the fundamentals of the two infrastructure stocks to determine which one is a better investment now.

The Case for Argan Stock

Argan benefits from strong multi-year growth visibility as rising electricity demand, data-center expansion, domestic manufacturing and broader electrification drive the need for new energy infrastructure. Management expects to add a handful of new projects over the next 10-18 months and believes its teams can execute 10-12 jobs simultaneously. Despite normal project timing fluctuations, backlog remained exceptionally strong at approximately $2.77 billion as of the first quarter of fiscal 2027, up 49.1% year over year from $1.86 billion.

Notably, AGX is undertaking several strategic initiatives to capitalize on rising demand for energy and industrial infrastructure while strengthening its long-term growth platform. The company is expanding its fabrication capabilities through a new North Carolina facility, which is expected to improve its ability to address additional Industrial opportunities. At the same time, the company is maintaining renewable-energy capabilities despite softer near-term demand, allowing it to remain positioned across multiple power-generation technologies.

Besides ensuring revenue stream stability, Argan also follows a disciplined capital allocation strategy focused mostly on organic growth investments, including workforce expansion and fabrication capacity additions, followed by a growing dividend, opportunistic share repurchases and selective acquisitions. As of April 30, 2026, the company held approximately $973.6 million in cash, cash equivalents and investments, with net liquidity at $421.4 million and no debt. This financial strength can support investments in capacity expansion, project requirements and other growth opportunities as demand for energy infrastructure accelerates.

However, despite all the tailwinds benefiting its prospects, Argan’s project execution remains a key risk to its profitability structure, particularly as it takes on increasingly large and complex power projects. Management noted that larger projects involve higher revenues and costs, while hiring and training skilled personnel to expand execution capacity takes time. Any execution missteps, cost escalation or delays could quickly weaken project-level margins and weigh on overall profitability.

Besides, AGX’s relatively limited business diversification leaves its financial performance heavily dependent on the Power segment and a concentrated pool of large projects. In the first quarter of fiscal 2027, Power generated $227 million, or 78% of consolidated revenues, while its $2.5 billion backlog represented the vast majority of the company’s $2.8 billion total backlog. More importantly, about 79% of the consolidated backlog was tied to natural gas projects. This concentration creates exposure to changes in demand, project timing and execution within the natural gas power market.

The Case for Primoris Services Stock

Primoris Services continues to benefit from favorable demand across natural gas generation, renewable energy, pipeline, power delivery and electrical infrastructure. Energy backlog increased to $6.2 billion, driven particularly by fixed awards in natural gas generation, electrical construction and industrial projects. Utilities revenues rose 2.8% year over year to $712.6 million, with backlog reaching $7.7 billion, supported by higher gas and power-delivery activity. As of the second quarter of 2026, PRIM had a record total backlog of $13.9 billion, up $1.9 billion from year-end 2025, including a record $8.2 billion of master service agreement (MSA) backlog.

Record quarterly bookings included approximately $1.4 billion of natural gas power-generation awards, alongside strong awards in electrical construction, industrial services and power delivery. Growing MSA revenues are improving revenue predictability, with annual MSA revenues reaching $2.6 billion on a TTM basis. These trends, supported by rising infrastructure demand, provide a strong foundation for revenue growth and margin improvement beyond 2026. Management expects improving project mix and operational execution to support stronger second-half performance. PRIM also remains focused on expanding MSA revenues and controlling SG&A, targeting full-year SG&A in the low-6% range, which could support future margin expansion.

However, Primoris Services’ prospects are being weakened by six challenged renewable-energy projects, where cost overruns stemmed from redesign efforts, project sequencing changes, labor-productivity issues, subsurface conditions and unfavorable weather. Consolidated revenues fell 10.7% year over year to $1.69 billion in the second quarter of 2026, primarily because of weaker Energy activity. Energy revenues declined 19.2% to $999.9 million, as new project starts, work releases and financial closes were slower than expected. Companywide gross margin contracted year over year to 4.9% from 12.3%, while operating income swung to a $26.8 million loss against $126.6 million profit in the year-ago period.

Yet, PRIM maintained its 2026 guidance, despite a weak first half, reflecting confidence in a second-half recovery. Adjusted EPS is expected at $2.05-$2.60, while adjusted EBITDA is projected at $275-$325 million. The company ended June 2026 with approximately $958.9 million in liquidity, including $218.2 million of cash and $740.7 million of available revolver capacity. Primoris Services also repurchased 449,287 shares for $50 million during the second quarter of 2026 and maintained its eight-cent quarterly dividend, while retaining $100 million under its share-repurchase authorization.

Stock Performance & Valuation

As witnessed from the chart below, in the past six months, Argan’s share price performance has outperformed Primoris Services’ declining trend and the broader Construction sector.