Head-To-Head Survey: Summit Materials (SUM) & Smart Sand (SND)

Summit Materials (NYSE: SUM) and Smart Sand (NASDAQ:SND) are both basic materials companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, dividends, risk and profitability.

Insider and Institutional Ownership

49.5% of Smart Sand shares are held by institutional investors. 2.0% of Summit Materials shares are held by company insiders. Comparatively, 46.4% of Smart Sand shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Summit Materials and Smart Sand’s top-line 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 $0.68 45.66
Smart Sand $59.23 million 6.59 $10.37 million $0.66 14.64

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Summit Materials and Smart Sand, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Summit Materials 0 2 6 0 2.75
Smart Sand 0 5 5 0 2.50

Summit Materials presently has a consensus target price of $31.50, indicating a potential upside of 1.45%. Smart Sand has a consensus target price of $13.45, indicating a potential upside of 39.23%. Given Smart Sand’s higher possible upside, analysts plainly believe Smart Sand is more favorable than Summit Materials.

Profitability

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

Net Margins Return on Equity Return on Assets
Summit Materials 4.09% 9.83% 3.18%
Smart Sand 18.67% 14.41% 11.85%

Summary

Smart Sand beats Summit Materials on 7 of the 13 factors compared between the two stocks.

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 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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