Summit Materials (NYSE: SUM) and Smart Sand (NASDAQ:SND) are both construction companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.
Earnings and Valuation
This table compares Summit Materials and Smart Sand’s revenue, earnings per share and valuation.
||Earnings Per Share
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.
Institutional & Insider Ownership
49.5% of Smart Sand shares are owned by institutional investors. 2.0% of Summit Materials shares are owned by insiders. Comparatively, 46.4% of Smart Sand shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This is a summary of current ratings for Summit Materials and Smart Sand, as reported by MarketBeat.
||Strong Buy Ratings
Summit Materials currently has a consensus price target of $31.50, indicating a potential upside of 0.10%. Smart Sand has a consensus price target of $13.65, indicating a potential upside of 36.50%. Given Smart Sand’s higher probable upside, analysts plainly believe Smart Sand is more favorable than Summit Materials.
This table compares Summit Materials and Smart Sand’s net margins, return on equity and return on assets.
||Return on Equity
||Return on Assets
Risk and Volatility
Summit Materials has a beta of 1.97, meaning that its stock price is 97% more volatile than the S&P 500. Comparatively, Smart Sand has a beta of 4.63, meaning that its stock price is 363% more volatile than the S&P 500.
Smart Sand beats Summit Materials on 8 of the 14 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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