Summit Materials (NYSE: SUM) and Cemex SAB de CV (NYSE:CX) are both mid-cap construction companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.
This table compares Summit Materials and Cemex SAB de CV’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cemex SAB de CV||8.38%||8.71%||3.10%|
This is a breakdown of current ratings for Summit Materials and Cemex SAB de CV, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cemex SAB de CV||0||3||4||1||2.75|
Summit Materials currently has a consensus target price of $31.50, indicating a potential upside of 1.42%. Cemex SAB de CV has a consensus target price of $10.46, indicating a potential upside of 39.87%. Given Cemex SAB de CV’s higher probable upside, analysts plainly believe Cemex SAB de CV is more favorable than Summit Materials.
Insider & Institutional Ownership
40.4% of Cemex SAB de CV shares are held by institutional investors. 2.0% of Summit Materials shares are held by insiders. Comparatively, 1.0% of Cemex SAB de CV shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Summit Materials and Cemex SAB de CV’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Summit Materials||$1.63 billion||2.10||$46.11 million||$0.67||46.32|
|Cemex SAB de CV||$13.40 billion||0.81||$752.16 million||$0.76||9.78|
Cemex SAB de CV has higher revenue and earnings than Summit Materials. Cemex SAB de CV is trading at a lower price-to-earnings ratio than Summit Materials, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Summit Materials has a beta of 1.97, indicating that its share price is 97% more volatile than the S&P 500. Comparatively, Cemex SAB de CV has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.
About Summit Materials
Summit Materials, Inc. is a construction materials company. The Company operates through three segments: West, East and Cement. As of December 31, 2016, the Company had operations in 21 states in the United States and in British Columbia, Canada. The Company’s materials include aggregates, which it supplies across the United States, and in British Columbia, Canada, and cement, which it supplies along the Mississippi River from Minneapolis to New Orleans. Within its markets, it offers construction materials and related downstream products through its vertical integration. In addition to supplying of aggregates to its customers, the Company also uses its materials internally to produce ready-mix concrete and asphalt paving mix. Its construction materials operations consists of aggregates production, including crushed stone and construction sand and gravel, cement and ready-mixed concrete production, and asphalt paving mix production.
About Cemex SAB de CV
CEMEX, S.A.B. de C.V. (CEMEX) is an operating and holding company engaged, directly or indirectly, through its operating subsidiaries, primarily in the production, distribution, marketing and sale of cement, ready-mix concrete, aggregates, clinker and other construction materials throughout the world, and that provides construction-related services to customers and communities in over 50 countries throughout the world. The Company operates in various locations, including Mexico, the United States, Europe, South America, Central America, the Caribbean, Asia, the Middle East and Africa. Its cement production facilities are located in Mexico, the United States, Spain, Egypt, Germany, Colombia, the Philippines, Poland, the Dominican Republic, the United Kingdom, Panama, Latvia, Puerto Rico, Thailand, Costa Rica and Nicaragua. The Company is a supplier of aggregates, primarily the crushed stone, sand and gravel, used in various forms of construction.
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