Critical Analysis: Smith-Midland (NASDAQ:SMID) vs. Martin Marietta Materials (NYSE:MLM)

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

Volatility & Risk

Martin Marietta Materials has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500. Comparatively, Smith-Midland has a beta of 1.62, meaning that its stock price is 62% more volatile than the S&P 500.

Earnings and Valuation

This table compares Martin Marietta Materials and Smith-Midland”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Martin Marietta Materials	$6.64 billion	5.19	$2.00 billion	$17.36	32.94
Smith-Midland	$84.45 million	2.32	$7.68 million	$1.85	19.97

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Martin Marietta Materials	16.07%	12.01%	6.39%
Smith-Midland	11.64%	23.92%	14.38%

Institutional & Insider Ownership

95.0% of Martin Marietta Materials shares are held by institutional investors. Comparatively, 49.9% of Smith-Midland shares are held by institutional investors. 0.7% of Martin Marietta Materials shares are held by company insiders. Comparatively, 3.9% of Smith-Midland shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Martin Marietta Materials and Smith-Midland, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Martin Marietta Materials	0	3	12	2	2.94
Smith-Midland	0	0	0	0	0.00

Martin Marietta Materials currently has a consensus price target of $603.86, suggesting a potential upside of 5.60%. Given Martin Marietta Materials’ stronger consensus rating and higher probable upside, research analysts clearly believe Martin Marietta Materials is more favorable than Smith-Midland.

Summary

Martin Marietta Materials beats Smith-Midland on 11 of the 15 factors compared between the two stocks.

About Martin Marietta Materials

Martin Marietta Materials, Inc., a natural resource-based building materials company, supplies aggregates and heavy-side building materials to the construction industry in the United States and internationally. It offers crushed stone, sand, and gravel products; ready mixed concrete and asphalt; paving products and services; and Portland and specialty cement for use in the infrastructure projects, and nonresidential and residential construction markets, as well as in the railroad, agricultural, utility, and environmental industries. The company also produces magnesia-based chemicals products; dolomitic lime primarily to customers for steel production and soil stabilization; and cement treated materials. Its chemical products are used in flame retardants, wastewater treatment, pulp and paper production, and other environmental applications. The company was founded in 1939 and is headquartered in Raleigh, North Carolina.

About Smith-Midland

Smith-Midland Corporation invents, develops, manufactures, markets, leases, licenses, sells, and installs precast concrete products and systems in the United States. It offers SlenderWall lightweight construction panel, lightweight exterior cladding used for the exterior walls of buildings; Sierra Wall that provides sound and sight barrier for use alongside highways around residential, industrial, and commercial properties; J-J Hooks highway safety barriers, used on roadways to separate lanes of traffic in construction work zone or traffic control purposes; Easi-Set precast building and Easi-Span expandable precast buildings, used in housing communications operations, traffic control systems, and mechanical and electrical stations; Easi-Set utility, vaults for house equipment, such as cable, telephone, or traffic signal equipment, and for underground storage, as well as custom-built utility vaults for special needs; SoftSound soundwall panels, it absorb highway noise; Beach Prisms erosion control modules for seawalls and jetties; and H2Out secondary drainage systems for panelized exterior cladding. It licenses its proprietary products in the United States, Canada, New Zealand, Australia, Belgium, Mexico, and Trinidad. The company markets its products through in-house sales force and independent sales representatives to contractors performing public and private construction contracts, such as construction of commercial buildings, public and private roads and highways, airports, and municipal utilities; and federal, state, and local transportation authorities. It serves its products to construction, highway, utilities, and farming industries. Smith-Midland Corporation was founded in 1960 and is based in Midland, Virginia.