Martin Marietta Materials (NYSE: MLM) and Smart Sand (NYSE:SND) are both construction companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, valuation, analyst recommendations, profitabiliy and earnings.

Institutional & Insider Ownership

96.3% of Martin Marietta Materials shares are held by institutional investors. 1.1% of Martin Marietta Materials shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Martin Marietta Materials pays an annual dividend of $1.68 per share and has a dividend yield of 0.7%. Smart Sand does not pay a dividend. Martin Marietta Materials pays out 25.4% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Martin Marietta Materials and Smart Sand’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Martin Marietta Materials $3.63 billion 3.88 $947.48 million $6.61 33.99
Smart Sand $73.93 million 3.55 $25.65 million N/A N/A

Martin Marietta Materials has higher revenue and earnings than Smart Sand.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Martin Marietta Materials and Smart Sand, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Martin Marietta Materials 0 5 4 0 2.44
Smart Sand 0 3 7 0 2.70

Martin Marietta Materials currently has a consensus target price of $229.67, suggesting a potential upside of 2.22%. Smart Sand has a consensus target price of $15.53, suggesting a potential upside of 138.89%. Given Smart Sand’s stronger consensus rating and higher possible upside, analysts clearly believe Smart Sand is more favorable than Martin Marietta Materials.

Profitability

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

Net Margins Return on Equity Return on Assets
Martin Marietta Materials 10.91% 10.32% 5.77%
Smart Sand 3.87% 2.51% 2.08%

Summary

Martin Marietta Materials beats Smart Sand on 10 of the 14 factors compared between the two stocks.

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.

About Smart Sand

Smart Sand, Inc. is a producer of Northern White raw frac sand, which is a proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells. The Company sells its products primarily to oil and natural gas exploration and production companies and oilfield service companies under a combination of long-term take-or-pay contracts and spot sales in the open market. It owns and operates a raw frac sand mine and related processing facility near Oakdale, Wisconsin. In addition to the Oakdale facility, it owns a second property in Jackson County, Wisconsin, known as Hixton site. Its sand reserves include a balanced concentration of coarse (20/40, 30/50 and 40/70 gradation) sands and fine (60/140 gradation) sand. Its reserves contain deposits of approximately 20% of 20/40 and coarser substrate, over 40% of 40/70 mesh substrate and approximately 40% of 100-mesh substrate. Its 30/50 gradation is a derivative of the 20/40 and 40/70 blends.

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