Shares of power plant construction company Argan (NYSE: AGX) hit a 52-week high earlier this month after the company reported powerful sales and earnings growth in its fiscal second quarter. The stock is climbing again on Thursday afternoon, up 6.6% through 12:10 p.m. ET, for an entirely different reason.

Argan is increasing its dividend.

How much is Argan's dividend?

Argan hasn't ever been a particularly generous dividend payer. At $0.30 per share, paid quarterly, and a $94 share price, the stock was paying a dividend yield of only 1.3% as recently as yesterday. But with business booming now, it seems Argan has decided to be a bit freer with its cash.

On Oct. 31, the company plans to increase its dividend payout by 25%, to $0.375 per share, per quarter, or $1.50 per year.

Is Argan stock a buy?

It's a big percentage increase for Argan. But the company says it can afford it because of the "growing pipeline of opportunities we're seeing as the power industry mobilizes to build the traditional gas-fired and renewable facilities necessary to meet the anticipated surge in energy demand associated with data centers, increased manufacturing activity and EV charging."

The resulting 1.6% dividend yield means that Argan will finally be paying out more dividends than the average S&P 500 stock, which according to Morningstar data pays a bit less than 1.5%. But the dividend alone isn't the only reason you should like Argan.

Cash is flowing freely at the construction company, which scored $169 million in positive free cash flow over the last 12 months. That gives the stock a low price-to-free-cash-flow ratio of 7. Combined with an expected earnings growth rate of 10%, I'd say this makes Argan not just a decent dividend stock -- but a pretty great value stock as well.

Should you invest $1,000 in Argan right now?

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