Reviewing Eagle Materials (NYSE:EXP) & Monarch Cement (OTCMKTS:MCEM)

Eagle Materials (NYSE:EXP) and Monarch Cement (OTCMKTS:MCEM) are both construction companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, earnings, dividends, profitability, risk and institutional ownership.

Volatility & Risk

Eagle Materials has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500. Comparatively, Monarch Cement has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500.

Earnings & Valuation

This table compares Eagle Materials and Monarch Cement”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Eagle Materials	$2.26 billion	2.83	$463.42 million	$13.76	14.21
Monarch Cement	$268.05 million	3.25	$66.05 million	$14.22	16.74

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

Dividends

Eagle Materials pays an annual dividend of $1.00 per share and has a dividend yield of 0.5%. Monarch Cement pays an annual dividend of $3.32 per share and has a dividend yield of 1.4%. Eagle Materials pays out 7.3% of its earnings in the form of a dividend. Monarch Cement pays out 23.3% 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.

Profitability

This table compares Eagle Materials and Monarch Cement’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Eagle Materials	20.50%	32.71%	15.04%
Monarch Cement	20.30%	13.45%	11.93%

Institutional & Insider Ownership

96.1% of Eagle Materials shares are held by institutional investors. 1.6% of Eagle Materials shares are held by company insiders. Comparatively, 26.0% of Monarch Cement shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Eagle Materials and Monarch Cement, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Eagle Materials	0	7	3	0	2.30
Monarch Cement	0	0	0	0	0.00

Eagle Materials presently has a consensus target price of $254.44, suggesting a potential upside of 30.10%. Given Eagle Materials’ stronger consensus rating and higher possible upside, research analysts clearly believe Eagle Materials is more favorable than Monarch Cement.

Summary

Eagle Materials beats Monarch Cement on 11 of the 16 factors compared between the two stocks.

About Eagle Materials

Eagle Materials Inc., through its subsidiaries, manufactures and sells heavy construction materials and light building materials in the United States. It operates in four segments: Cement, Concrete and Aggregates, Gypsum Wallboard, and Recycled Paperboard. The company engages in the mining of limestone for the manufacture, production, distribution, and sale of Portland cement, including Portland limestone cement; grinding and sale of slag; and mining of gypsum for the manufacture and sale of gypsum wallboards used to finish the interior walls and ceilings in residential, commercial, and industrial structures, as well as well as containerboard and lightweight packaging grades; manufacture and sale of recycled paperboard to the gypsum wallboard industry and other paperboard converters; the sale of readymix concrete; and mining and sale of aggregates, such as crushed stone, sand, and gravel. Its products are used in commercial and residential construction; public construction projects to build, expand, and repair roads and highways; and repair and remodel activities. The company was formerly known as Centex Construction Products, Inc. and changed its name to Eagle Materials, Inc. in January 2004. Eagle Materials Inc. was founded in 1963 and is headquartered in Dallas, Texas.

About Monarch Cement

The Monarch Cement Company engages in the manufacture and sale of portland cement in the United States. The company also provides masonry cement, ready-mixed concrete, concrete products, and sundry building materials. It primarily serves contractors, ready-mixed concrete plants, concrete products plants, building materials dealers, and governmental agencies. The company sells its products principally in the State of Kansas, the State of Iowa, southeast Nebraska, western Missouri, northwest Arkansas, and northern Oklahoma. The Monarch Cement Company was founded in 1908 and is based in Humboldt, Kansas.