With a day by day lack of 3.97% and a 3-month achieve of 5.71%, Martin Marietta Supplies Inc (NYSE:MLM) has been a subject of curiosity amongst buyers. The corporate’s Earnings Per Share (EPS) stand at 15.24, sparking the query: is the inventory pretty valued? This text goals to offer an in depth valuation evaluation of Martin Marietta Supplies. Learn on to uncover insights into the corporate’s intrinsic worth.
Firm Overview
Martin Marietta Supplies Inc, one of many largest producers of development aggregates in the USA, has a wealthy historical past and sturdy operations. The corporate offered 207 million tons of aggregates in 2022, with its main markets being Texas, Colorado, North Carolina, Georgia, and Florida. Martin Marietta Supplies additionally produces cement and makes use of its aggregates in its asphalt and ready-mixed concrete companies. The corporate’s magnesia specialties enterprise produces magnesia-based chemical merchandise and dolomitic lime.
With a present inventory worth of $439.24 and a market cap of $27.10 billion, the corporate’s valuation appears to align intently with its GF Worth of $430.36, indicating that the inventory may very well be pretty valued.
An Overview of GF Worth
The GF Worth is a proprietary measure that represents the present intrinsic worth of a inventory. This worth is derived from historic buying and selling multiples, a GuruFocus adjustment issue based mostly on previous efficiency and progress, and future enterprise efficiency estimates. If a inventory’s worth is considerably above the GF Worth Line, it’s possible overvalued, and its future return could also be poor. Conversely, whether it is considerably beneath the GF Worth Line, its future return may very well be increased.
Contemplating these elements, Martin Marietta Supplies seems to be pretty valued. As such, the long-term return of its inventory is more likely to align intently with the speed of its enterprise progress.
Monetary Energy
Firms with weak monetary energy pose a excessive threat of everlasting capital loss to buyers. To keep away from this, it is essential to overview an organization’s monetary energy earlier than buying shares. Key indicators of monetary energy embrace the cash-to-debt ratio and curiosity protection. Martin Marietta Supplies has a cash-to-debt ratio of 0.08, which ranks worse than 85.2% of 358 corporations within the Constructing Supplies trade. The general monetary energy of Martin Marietta Supplies is 5 out of 10, indicating honest monetary energy.
Profitability and Progress
Investing in worthwhile corporations, particularly these with constant profitability over the long run, is mostly much less dangerous. Martin Marietta Supplies has been worthwhile 10 years over the previous decade. Over the previous twelve months, the corporate had a income of $6.50 billion and Earnings Per Share (EPS) of $15.24. Its working margin is 20.63%, which ranks higher than 86.81% of 364 corporations within the Constructing Supplies trade. Total, the profitability of Martin Marietta Supplies is ranked 9 out of 10, indicating sturdy profitability.
Progress is a vital think about an organization’s valuation. A faster-growing firm creates extra worth for shareholders, particularly if the expansion is worthwhile. The three-year common annual income progress of Martin Marietta Supplies is 9.3%, which ranks higher than 64.61% of 356 corporations within the Constructing Supplies trade. The three-year common EBITDA progress fee is 12.4%, which ranks higher than 70.4% of 321 corporations in the identical trade.
ROIC vs WACC
Evaluating an organization’s return on invested capital (ROIC) to its weighted common value of capital (WACC) is one other option to consider its profitability. If the ROIC is increased than the WACC, it signifies that the corporate is creating worth for shareholders. Over the previous 12 months, Martin Marietta Supplies’ ROIC was 7.56, whereas its WACC got here in at 8.65.
Conclusion
In abstract, the inventory of Martin Marietta Supplies seems to be pretty valued. The corporate’s monetary situation is honest, and its profitability is powerful. Its progress ranks higher than 70.4% of 321 corporations within the Constructing Supplies trade. To study extra about Martin Marietta Supplies inventory, you may take a look at its 30-Yr Financials right here.
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This text first appeared on GuruFocus.
