We recently compiled a list of the 10 Hottest Mid-Cap Stocks So Far in 2025. In this article, we are going to take a look at where Argan, Inc. (NYSE:AGX) stands against the other mid-cap stocks.
If you’ve been fixated on the usual suspects in the S&P 500, you might be missing out on some solid action. Many mid-cap stocks have been delivering stellar gains in the first few weeks of this month, and there’s a good chance the momentum will stick around.
We believe they’ll prove to be more nimble than the large-cap stocks. It’s worth looking at them because they are comparatively trading at more attractive valuations and they also strike the sweet spot between the stability of large caps and the growth potential of small caps.
The S&P MidCap 400 index has outpaced the S&P 500 index year-to-date. It’s not just a flash in the pan, either. Historically, mid-caps have outperformed both their larger and smaller counterparts in 55% of rolling five-year periods since 1983. As such, it’s worth looking deeper into each top mid-cap performer.
A worker inspecting a newly built bridge, symbolic of the company’s engineering prowess.
Argan (NYSE:AGX) is a construction company that does a lot of work in the power industry. It has seen surging revenue and backlog and has recently declared a quarterly dividend of $0.365 per share. One of its subsidiaries — Gemma Power Systems — also got the go-ahead for a 700 MW combined-cycle natural gas-fired power plant in the U.S.
Argan reported Q3 FY2025 results, with revenue up 57% year-over-year to $257 million, whereas net income jumped to $28 million from $5 million in the prior-year quarter. There’s a lot of revenue coming in, and they’ve been managing to maintain a hefty cash balance with little to no long-term debt. This strong balance sheet has definitely been one of the reasons investors have kept an eye on them.
I believe it’s still a good long-term investment. If AI continues to be a hot topic and sees continuous amounts of investments pouring in, there’s no reason to believe that power demand is going to come down.
Overall AGX ranks 8th on our list of the hottest mid-cap stocks so far in 2025. While we acknowledge the potential of AGX as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AGX but that trades at less than 5 times its earnings, check out our report about thecheapest AI stock.
