Critical Review: Martin Marietta Materials (MLM) & Forterra (NASDAQ:FRTA)

Martin Marietta Materials (NYSE: MLM) and Forterra (NASDAQ:FRTA) are both construction companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Valuation and Earnings

This table compares Martin Marietta Materials and Forterra’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Martin Marietta Materials $3.72 billion 3.39 $962.24 million $6.96 28.81
Forterra $1.57 billion 0.18 $160.18 million N/A N/A

Martin Marietta Materials has higher revenue and earnings than Forterra.

Analyst Ratings

This is a summary of current ratings and price targets for Martin Marietta Materials and Forterra, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Martin Marietta Materials 0 5 4 0 2.44
Forterra 0 6 3 0 2.33

Martin Marietta Materials currently has a consensus target price of $229.67, suggesting a potential upside of 14.52%. Forterra has a consensus target price of $14.88, suggesting a potential upside of 233.52%. Given Forterra’s higher possible upside, analysts clearly believe Forterra is more favorable than Martin Marietta Materials.

Insider and Institutional Ownership

98.3% of Martin Marietta Materials shares are held by institutional investors. Comparatively, 98.6% of Forterra shares are held by institutional investors. 8.5% of Martin Marietta Materials shares are held by insiders. Comparatively, 0.3% of Forterra shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Martin Marietta Materials 11.19% 10.69% 5.99%
Forterra -4.72% -45.03% -3.19%

Dividends

Martin Marietta Materials pays an annual dividend of $1.68 per share and has a dividend yield of 0.8%. Forterra does not pay a dividend. Martin Marietta Materials pays out 24.1% of its earnings in the form of a dividend.

Summary

Martin Marietta Materials beats Forterra on 10 of the 13 factors compared between the two stocks.

Martin Marietta Materials Company Profile

Martin Marietta Materials, Inc. is a supplier of aggregates products (crushed stone, sand, and gravel) used for the construction of infrastructure, nonresidential, and residential projects. Aggregates products are also used for railroad ballast and in agricultural, utility and environmental applications. The Company’s Aggregates business operates through three segments: the Mid-America Group, Southeast Group and West Group. The Company’s business is categorized into Aggregates Business, Cement Business and Magnesia Specialties Business. Its Cement business is reported through the Cement segment. Its Magnesia Specialties business manufactures and markets magnesia-based chemical products used in industrial, agricultural, and environmental applications, and dolomitic lime sold to customers in the steel industry. Its Cement business produces Portland and specialty cements. It manufactures and markets, through its Magnesia Specialties business, magnesia-based chemical products.

Forterra Company Profile

Forterra, Inc. is a manufacturer of pipe and precast products. The Company offers products for a range of water-related infrastructure applications, including water transmission, distribution and drainage. The Company operates approximately 95 facilities. Its products are available in the United States and Eastern Canada.

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