The rise in United States energy infrastructure spending is one of the strongest secular themes in the industrial sector, and companies like Argan, Inc. AGX and Primoris Services Corporation PRIM are well-positioned to benefit. The key point is that the US needs not only more electricity generation but also more infrastructure to produce, transport and deliver that power reliably.

Argan is a Virginia-based engineering and construction company, focused primarily on the power and industrial infrastructure markets. Primoris Services is a Texas-based specialty infrastructure contractor that provides engineering, construction, maintenance and replacement services for critical infrastructure projects across the United States and Canada.

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

The Case for Argan Stock

Argan is benefiting from powerful long-term energy infrastructure trends driven by data center expansion, manufacturing reshoring, electrification and growing electricity demand. Its expertise in large-scale natural gas and renewable power projects positions it well to capitalize on this opportunity. Despite normal project timing fluctuations, backlog remained exceptionally strong at approximately $2.77 billion as of the first-quarter fiscal 2027, which was up 49.1% year over year from $1.86 billion, supported by multiple large gas-fired projects and industrial contracts. Management expects to add several new projects over the next 10-18 months, providing visibility into future revenue growth and reinforcing confidence in sustained business momentum.

Besides, Argan delivered record first-quarter fiscal 2027 results, with revenues surging 50% year over year to $291 million. Gross margin expanded 200 basis points (bps) to 21%, while earnings per share (EPS) grew 102.5% to $3.24 year over year. Strong project execution, favorable contract mix and ahead-of-schedule completion of key projects supported profitability. Growth across all operating segments demonstrates broad-based demand and strengthens confidence in the company’s earnings trajectory.

AGX expects combined-cycle natural gas facilities to remain the dominant contributor to backlog while maintaining renewable capabilities to capture future opportunities. Expansion of industrial fabrication capacity, growing data-center-related demand and the company’s ability to execute 10-12 projects simultaneously further enhance its competitive position.

Notably, management follows a disciplined capital allocation strategy focused first on organic growth investments, including workforce expansion and fabrication capacity additions, followed by a growing dividend, opportunistic share repurchases and selective acquisitions. Argan ended the first quarter of fiscal 2027 with $973.6 million in cash, cash equivalents and investments, net liquidity of $421.4 million and no debt. Strong operating cash flow, customer prepayments, project advances and investment income continue to support liquidity. During the fiscal quarter ended April 30, 2026, Argan repurchased shares worth $3 million and paid dividends of $7 million.

Management follows a disciplined capital allocation strategy focused first on organic growth investments, including workforce expansion and fabrication capacity additions, followed by a growing dividend, opportunistic share repurchases and selective acquisitions. This balanced approach supports long-term growth while consistently returning capital to shareholders.

The Case for Primoris Services Stock

Primoris Services remains well-positioned to capitalize on accelerating U.S. investment in power generation, grid modernization, natural gas infrastructure, pipelines and data centers. Management highlighted strong bidding activity across natural gas generation, renewables and pipeline projects, while Utilities continues to benefit from rising power delivery demand as customers expand grid reliability and capacity. Although total backlog moderated sequentially to $11.6 billion due to award timing, Utilities backlog climbed to a record $6.9 billion, supported by a 7.2% increase in recurring MSA backlog to $7.5 billion.

During the first quarter of 2026, the Utilities segment posted 12.3% year-over-year revenue growth, while the gross margin expanded 60 basis points to 9.8%, driven by higher power delivery and gas operations activity. Management expects Utilities margins to improve further toward its 10-12% target range, while Energy margins should recover beginning in the second quarter of 2026 as new natural gas and renewable projects ramp and PayneCrest contributes.

Moreover, PRIM continues to maintain a disciplined capital allocation strategy focused on balancing organic investments, strategic acquisitions and shareholder returns. Following the PayneCrest acquisition, the company retained strong liquidity of approximately $676.5 million, with plans to invest in growth opportunities while remaining selective about acquisitions that meet strict financial return thresholds.

Despite favorable long-term industry trends, Primoris Services faces several near-term headwinds. First-quarter 2026 consolidated revenues declined 5.4% year over year as renewable energy activity slowed and project timing shifted, while the Energy segment experienced weaker profitability due to execution challenges on a few legacy renewable projects and delayed project starts. In addition, the company expects first-half 2026 results to remain softer than the second half, making its full-year 2026 guidance increasingly dependent on successful project execution, margin recovery and timely conversion of its strong bid pipeline into awarded work.

Moreover, integration risks related to the PayneCrest acquisition and continued exposure to project timing, labor availability and customer spending patterns also remain factors investors should monitor.

Stock Performance & Valuation

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

Considering valuation, over the last five years, Argan has been trading above Primoris Services on a forward 12-month price-to-earnings (P/E) ratio basis.

Overall, from these technical indicators, it can be deduced that AGX stock offers an accelerating growth trend but with a premium valuation, while PRIM stock offers a declining trend with a discounted valuation.

Comparing EPS Estimate Trends: AGX vs. PRIM

The Zacks Consensus Estimate for AGX’s fiscal 2027 and fiscal 2028 earnings has moved upward over the past 30 days to $12.60 and $16.66 per share, respectively. The revised estimates for fiscal 2027 and fiscal 2028 imply year-over-year growth of 29.4% and 32.2%, respectively.

AGX's EPS Trend

The Zacks Consensus Estimate for PRIM’s 2026 and 2027 earnings has trended downward over the past seven days to $2.75 and $5.26 per share, respectively. The revised estimates for 2026 imply a 51.1% year-over-year decline, while those for 2027 indicate 91.2% year-over-year growth.

PRIM's EPS Trend

Return on Equity (ROE) of AGX & PRIM Stocks

Argan’s trailing 12-month ROE of 36.89% significantly exceeds Primoris Services’ average, underscoring its efficiency in generating shareholder returns.

Investment Decision: Choosing AGX Stock Over PRIM Stock?

Argan continues to execute exceptionally well, supported by broad-based growth across its power and industrial businesses. Rising demand for natural gas generation, renewable energy and data center infrastructure provides strong revenue visibility, while management expects additional project awards over the next 10-18 months. Earnings estimates for fiscal 2027 and 2028 continue to move higher, and its industry-leading 36.9% ROE reflects outstanding capital efficiency.

Meanwhile, Primoris Services also benefits from attractive infrastructure tailwinds, particularly in utilities and power delivery, with a record Utilities backlog and improving margin prospects. However, declining first-quarter revenues, execution challenges in legacy renewable projects, softer near-term guidance, acquisition integration risks and downward earnings estimate revisions temper the investment thesis.

Although Argan trades at a premium valuation, that premium appears justified by its superior execution, accelerating stock performance, stronger balance sheet and significantly better earnings trajectory. Its stronger fundamentals, positive estimate revisions, robust liquidity and favorable exposure to the expanding U.S. energy infrastructure cycle provide a more compelling risk-reward profile and greater upside potential than Primoris Services at the current stage.

Thus, with a Zacks Rank #1 (Strong Buy) compared with PRIM stock’s current Zacks Rank #5 (Strong Sell), AGX stock is clearly the better stock to buy now. You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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