Martin Marietta Materials (NYSE:MLM) & CRH (NYSE:CRH) Critical Analysis

Martin Marietta Materials (NYSE:MLM) and CRH (NYSE:CRH) are both large-cap materials companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Earnings and Valuation

This table compares Martin Marietta Materials and CRH”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Martin Marietta Materials	$6.15 billion	5.44	$1.14 billion	$40.70	13.70
CRH	$37.45 billion	1.72	$3.73 billion	$5.33	18.17

CRH has higher revenue and earnings than Martin Marietta Materials. Martin Marietta Materials is trading at a lower price-to-earnings ratio than CRH, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

95.0% of Martin Marietta Materials shares are held by institutional investors. Comparatively, 62.5% of CRH shares are held by institutional investors. 0.7% of Martin Marietta Materials shares are held by insiders. Comparatively, 0.1% of CRH shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Martin Marietta Materials and CRH, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Martin Marietta Materials	2	5	13	0	2.55
CRH	0	1	18	1	3.00

Martin Marietta Materials currently has a consensus target price of $639.59, suggesting a potential upside of 14.75%. CRH has a consensus target price of $126.18, suggesting a potential upside of 30.26%. Given CRH’s stronger consensus rating and higher probable upside, analysts clearly believe CRH is more favorable than Martin Marietta Materials.

Profitability

This table compares Martin Marietta Materials and CRH’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Martin Marietta Materials	36.73%	9.49%	5.11%
CRH	9.19%	15.03%	6.38%

Risk & Volatility

Martin Marietta Materials has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500. Comparatively, CRH has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.

Dividends

Martin Marietta Materials pays an annual dividend of $3.36 per share and has a dividend yield of 0.6%. CRH pays an annual dividend of $1.56 per share and has a dividend yield of 1.6%. Martin Marietta Materials pays out 8.3% of its earnings in the form of a dividend. CRH pays out 29.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Martin Marietta Materials has raised its dividend for 9 consecutive years.

Summary

CRH beats Martin Marietta Materials on 11 of the 18 factors compared between the two stocks.

About Martin Marietta Materials

Martin Marietta Materials, Inc., a natural resource-based building materials company, supplies aggregates and heavy-side building materials to the construction industry in the United States and internationally. It offers crushed stone, sand, and gravel products; ready mixed concrete and asphalt; paving products and services; and Portland and specialty cement for use in the infrastructure projects, and nonresidential and residential construction markets, as well as in the railroad, agricultural, utility, and environmental industries. The company also produces magnesia-based chemicals products; dolomitic lime primarily to customers for steel production and soil stabilization; and cement treated materials. Its chemical products are used in flame retardants, wastewater treatment, pulp and paper production, and other environmental applications. The company was founded in 1939 and is headquartered in Raleigh, North Carolina.

About CRH

CRH plc, together with its subsidiaries, provides building materials solutions in Ireland and internationally. It operates through four segments: Americas Materials Solutions, Americas Building Solutions, Europe Materials Solutions, and Europe Building Solutions. The company provides solutions for the construction and maintenance of public infrastructure and commercial and residential buildings; and produces and sells aggregates, cement, readymixed concrete, and asphalt, as well as provides paving and construction services. It also manufactures, supplies, and delivers solutions for the built environment in communities across North America; and offers building and infrastructure solutions serving complex critical utility infrastructure, such as water, energy, transportation, and telecommunications projects, and outdoor living solutions for enhancing private and public spaces. In addition, the company combines materials, products, and services to produce a wide range of architectural and infrastructural solutions for use in the building and renovation of critical utility infrastructure, commercial and residential buildings, and outdoor living spaces for the built environment. Further, it produces and supplies precast and pre-stressed concrete products comprising floor and wall elements, beams, vaults, pipes, and manholes; granite, limestone, and sandstone; concrete and polymer-based products, such as underground vaults, drainage systems, utility enclosures, and modular precast structures; engineered steel, polymer-based anchoring, fixing, and connecting solutions; concrete masonry, hardscape and related products, including pavers, blocks and curbs, retaining walls, and slabs; and fencing and railing systems, composite decking, lawn and garden products, and packaged concrete mixes. The company was founded in 1936 and is headquartered in Dublin, Ireland.