Analyzing Monarch Cement (OTCMKTS:MCEM) & Martin Marietta Materials (NYSE:MLM)

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

Insider and Institutional Ownership

95.0% of Martin Marietta Materials shares are owned by institutional investors. 26.0% of Monarch Cement shares are owned by insiders. Comparatively, 0.7% of Martin Marietta Materials shares are owned by 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 price targets for Monarch Cement and Martin Marietta Materials, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Monarch Cement	0	0	0	0	0.00
Martin Marietta Materials	0	5	13	2	2.85

Martin Marietta Materials has a consensus price target of $628.56, suggesting a potential upside of 1.21%. Given Martin Marietta Materials’ stronger consensus rating and higher probable upside, analysts clearly believe Martin Marietta Materials is more favorable than Monarch Cement.

Risk & Volatility

Monarch Cement has a beta of 0.59, suggesting that its stock price is 41% less volatile than the S&P 500. Comparatively, Martin Marietta Materials has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500.

Earnings & Valuation

This table compares Monarch Cement and Martin Marietta Materials”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Monarch Cement	$268.05 million	2.99	$66.05 million	$16.07	13.65
Martin Marietta Materials	$6.54 billion	5.73	$2.00 billion	$18.03	34.45

Martin Marietta Materials has higher revenue and earnings than Monarch Cement. Monarch Cement 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 Monarch Cement and Martin Marietta Materials’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Monarch Cement	19.56%	12.31%	10.87%
Martin Marietta Materials	16.47%	11.88%	6.25%

Dividends

Monarch Cement pays an annual dividend of $3.32 per share and has a dividend yield of 1.5%. Martin Marietta Materials pays an annual dividend of $3.32 per share and has a dividend yield of 0.5%. Monarch Cement pays out 20.7% of its earnings in the form of a dividend. Martin Marietta Materials pays out 18.4% 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. Martin Marietta Materials has raised its dividend for 9 consecutive years.

Summary

Martin Marietta Materials beats Monarch Cement on 13 of the 18 factors compared between the two stocks.

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.

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.