Critical Review: Martin Marietta Materials (MLM) & MDU Resources (MDU)

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

Insider & Institutional Ownership

How to Become a New Pot Stock Millionaire

100.0% of Martin Marietta Materials shares are owned by institutional investors. Comparatively, 64.0% of MDU Resources shares are owned by institutional investors. 8.5% of Martin Marietta Materials shares are owned by company insiders. Comparatively, 1.0% of MDU Resources shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Martin Marietta Materials and MDU Resources, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Martin Marietta Materials 0 4 5 0 2.56
MDU Resources 0 0 2 0 3.00

Martin Marietta Materials presently has a consensus target price of $241.13, suggesting a potential upside of 22.57%. MDU Resources has a consensus target price of $28.75, suggesting a potential upside of 4.09%. Given Martin Marietta Materials’ higher possible upside, equities analysts clearly believe Martin Marietta Materials is more favorable than MDU Resources.

Volatility and Risk

Martin Marietta Materials has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, MDU Resources has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500.

Dividends

Martin Marietta Materials pays an annual dividend of $1.76 per share and has a dividend yield of 0.9%. MDU Resources pays an annual dividend of $0.79 per share and has a dividend yield of 2.9%. Martin Marietta Materials pays out 24.5% of its earnings in the form of a dividend. MDU Resources pays out 63.2% 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. MDU Resources has raised its dividend for 8 consecutive years. MDU Resources is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Martin Marietta Materials and MDU Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Martin Marietta Materials 17.99% 10.55% 5.80%
MDU Resources 6.33% 10.46% 3.92%

Valuation and Earnings

This table compares Martin Marietta Materials and MDU Resources’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Martin Marietta Materials $3.97 billion 3.12 $713.34 million $7.18 27.40
MDU Resources $4.44 billion 1.21 $281.20 million $1.25 22.10

Martin Marietta Materials has higher earnings, but lower revenue than MDU Resources. MDU Resources 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.

Summary

Martin Marietta Materials beats MDU Resources on 13 of the 17 factors compared between the two stocks.

Martin Marietta Materials Company Profile

Martin Marietta Materials, Inc., a natural-resource-based building materials company, supplies aggregates and heavy building materials to the construction industry in the United States and internationally. The company provides crushed stone, sand, and gravel products; ready mixed concrete, and asphalt and paving products; 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. It also manufactures and markets magnesia-based chemical products for the industrial, agricultural, and environmental applications; and dolomitic lime primarily for customers in the steel and mining industries, as well as provides road paving construction services. The company's chemical products are used in flame retardants, wastewater treatment, pulp and paper production, and other environmental applications. Martin Marietta Materials, Inc. was founded in 1993 and is headquartered in Raleigh, North Carolina.

MDU Resources Company Profile

MDU Resources Group, Inc. engages in regulated energy delivery, and construction materials and services businesses in the United States. The company operates through five segments: Electric, Natural Gas Distribution, Pipeline and Midstream, Construction Materials and Contracting, and Construction Services. The Electric segment generates, transmits, and distributes electricity in Montana, North Dakota, South Dakota, and Wyoming. As of December 31, 2017, it served 142,901 residential, commercial, industrial, and municipal customers in 178 communities and adjacent rural areas. The Natural Gas Distribution segment distributes natural gas in Montana, North Dakota, South Dakota, and Wyoming, as well as Idaho, Minnesota, Oregon, and Washington; and offers related value-added services. It served approximately 938,867 residential, commercial, and industrial customers in 335 communities and adjacent rural areas. The Pipeline and Midstream segment provides natural gas transportation, underground storage, and gathering services primarily in the Rocky Mountain and northern Great Plains regions. It also provides cathodic protection and other energy-related services. The Construction Materials and Contracting segment mines, processes, and sells construction aggregates; produces and sells asphalt mix; and supplies ready-mixed concrete in the central, southern, and western United States, as well as Alaska and Hawaii. The Construction Services segment designs, constructs, and maintains overhead and underground electrical distribution and transmission lines, substations, external lighting, traffic signalization, and gas pipelines; electrical and communication wiring and infrastructure, and fire suppression systems; and renewable energy projects. It also offers utility excavation, and mechanical piping and services; and manufactures and distributes transmission line construction equipment and other supplies. The company was founded in 1924 and is based in Bismarck, North Dakota.

Receive News & Ratings for Martin Marietta Materials Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Martin Marietta Materials and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply