Contrasting Lafargeholcim (HCMLY) and HeidelbergCement (HDELY)

Lafargeholcim (OTCMKTS: HCMLY) and HeidelbergCement (OTCMKTS:HDELY) are both large-cap construction companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, profitability, dividends, risk, valuation, earnings and institutional ownership.

Risk & Volatility

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Lafargeholcim has a beta of 1.64, meaning that its stock price is 64% more volatile than the S&P 500. Comparatively, HeidelbergCement has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500.

Profitability

This table compares Lafargeholcim and HeidelbergCement’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lafargeholcim -6.36% 5.26% 2.64%
HeidelbergCement 5.31% 6.97% 3.27%

Dividends

Lafargeholcim pays an annual dividend of $0.35 per share and has a dividend yield of 3.3%. HeidelbergCement pays an annual dividend of $0.23 per share and has a dividend yield of 1.2%. Lafargeholcim pays out -60.3% of its earnings in the form of a dividend. HeidelbergCement pays out 22.5% 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. Lafargeholcim is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Lafargeholcim and HeidelbergCement’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lafargeholcim $26.55 billion 1.23 -$1.70 billion ($0.58) -18.53
HeidelbergCement $16.51 billion 1.16 $781.48 million $1.02 18.91

HeidelbergCement has lower revenue, but higher earnings than Lafargeholcim. Lafargeholcim is trading at a lower price-to-earnings ratio than HeidelbergCement, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

0.1% of Lafargeholcim shares are held by institutional investors. Comparatively, 0.1% of HeidelbergCement shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Lafargeholcim and HeidelbergCement, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lafargeholcim 1 4 1 0 2.00
HeidelbergCement 0 3 5 0 2.63

Summary

HeidelbergCement beats Lafargeholcim on 8 of the 14 factors compared between the two stocks.

Lafargeholcim Company Profile

LafargeHolcim Ltd (LafargeHolcim) is a holding company operating in building materials industry. The Company’s segments include Asia Pacific, Latin America, Europe, North America and Middle East Africa. The Company has three product lines, such as Cement, which consists of clinker, cement and other cementitious materials; Aggregates, and Other construction materials and services, which consists of ready-mix concrete, concrete products, asphalt, construction and paving, trading and other products and services. The Company serves masons, builders, architects and engineers around the world. The Company operates in over 90 countries. The Company produces a range of cements and hydraulic binders. These range from Portland cements and classic masonry cements to specialized products for a range of environments, such as environments exposed to seawater, sulfates and other natural conditions. Its concrete brands include Agilia, Chronolia, Artevia, Extensia, Thermedia and Hydromedia.

HeidelbergCement Company Profile

HeidelbergCement AG produces and distributes cement, aggregates, ready-mixed concrete, and asphalt worldwide. Its cement products include special cements with targeted characteristics, special geotechnical building materials, and a range of binders. The company offers natural stone and crushed aggregates, including sand, gravel, stone chippings, and crushed stones; concrete/ready-mixed concrete that is used for the production of precast concrete parts, such as stairs, ceiling elements, or structural components, as well as for use in the construction of tunnels or bridges, office buildings, and schools; and asphalt, which is primarily used in the building of traffic infrastructure comprising roads, walkways, and parking lots. It also trades in cement, clinker, solid fuels, and other building materials; and purchases and delivers coal and petroleum coke through sea routes to other cement companies. The company was founded in 1873 and is headquartered in Heidelberg, Germany.

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