Head-To-Head Contrast: Vulcan Materials (NYSE:VMC) & Martin Marietta Materials (MLM)

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

Earnings and Valuation

This table compares Vulcan Materials and Martin Marietta Materials’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Vulcan Materials $3.70 billion 4.07 $940.88 million $3.09 36.88
Martin Marietta Materials $3.72 billion 3.39 $962.24 million $6.96 28.81

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

Dividends

Vulcan Materials pays an annual dividend of $1.00 per share and has a dividend yield of 0.9%. Martin Marietta Materials pays an annual dividend of $1.68 per share and has a dividend yield of 0.8%. Vulcan Materials pays out 32.4% of its earnings in the form of a dividend. Martin Marietta Materials pays out 24.1% 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. Vulcan Materials has raised its dividend for 3 consecutive years. Vulcan Materials is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Vulcan Materials 11.28% 8.72% 4.48%
Martin Marietta Materials 11.19% 10.69% 5.99%

Risk & Volatility

Vulcan Materials has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Martin Marietta Materials has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.

Institutional & Insider Ownership

84.9% of Vulcan Materials shares are owned by institutional investors. Comparatively, 98.3% of Martin Marietta Materials shares are owned by institutional investors. 0.9% of Vulcan Materials shares are owned by insiders. Comparatively, 8.5% of Martin Marietta Materials shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Vulcan Materials and Martin Marietta Materials, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vulcan Materials 0 3 5 0 2.63
Martin Marietta Materials 0 5 4 0 2.44

Vulcan Materials currently has a consensus price target of $138.60, suggesting a potential upside of 21.61%. Martin Marietta Materials has a consensus price target of $229.67, suggesting a potential upside of 14.52%. Given Vulcan Materials’ stronger consensus rating and higher probable upside, analysts plainly believe Vulcan Materials is more favorable than Martin Marietta Materials.

Summary

Martin Marietta Materials beats Vulcan Materials on 9 of the 17 factors compared between the two stocks.

About Vulcan Materials

Vulcan Materials Company is a supplier of construction aggregates (primarily crushed stone, sand and gravel) and a producer of asphalt mix and ready-mixed concrete. The Company operates through four segments: Aggregates, Asphalt Mix, Concrete and Calcium. The Aggregates segment produces and sells aggregates (crushed stone, sand and gravel, sand, and other aggregates) and related products and services (transportation and other). The Company produces and sells asphalt mix in Arizona, California, New Mexico and Texas. The Company produces and sells ready-mixed concrete in Georgia, Maryland, New Mexico, Texas, Virginia, Washington District of Columbia and the Bahamas. The Calcium segment consists of a Florida facility that mines, produces and sells calcium products. As of December 31, 2016, it had 337 active aggregates facilities. The Company sells aggregates that are used as ballast for construction and maintenance of railroad tracks.

About Martin Marietta Materials

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.

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