Critical Analysis: Arcosa (NYSE:ACA) vs. United States Lime & Minerals (NASDAQ:USLM)

Arcosa (NYSE:ACA) and United States Lime & Minerals (NASDAQ:USLM) are both mid-cap materials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, dividends, valuation, earnings, analyst recommendations and profitability.

Dividends

Arcosa pays an annual dividend of $0.20 per share and has a dividend yield of 0.1%. United States Lime & Minerals pays an annual dividend of $0.24 per share and has a dividend yield of 0.2%. Arcosa pays out 2.0% of its earnings in the form of a dividend. United States Lime & Minerals pays out 5.1% 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. United States Lime & Minerals has raised its dividend for 2 consecutive years. United States Lime & Minerals is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

90.7% of Arcosa shares are held by institutional investors. Comparatively, 27.1% of United States Lime & Minerals shares are held by institutional investors. 1.8% of Arcosa shares are held by company insiders. Comparatively, 1.5% of United States Lime & Minerals shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Arcosa and United States Lime & Minerals”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arcosa	$2.88 billion	2.47	$208.40 million	$9.98	14.53
United States Lime & Minerals	$376.92 million	9.10	$134.27 million	$4.67	25.61

Arcosa has higher revenue and earnings than United States Lime & Minerals. Arcosa is trading at a lower price-to-earnings ratio than United States Lime & Minerals, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Arcosa and United States Lime & Minerals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arcosa	0	5	2	0	2.29
United States Lime & Minerals	0	1	0	0	2.00

Arcosa presently has a consensus target price of $141.25, suggesting a potential downside of 2.58%. Given Arcosa’s stronger consensus rating and higher probable upside, equities analysts clearly believe Arcosa is more favorable than United States Lime & Minerals.

Profitability

This table compares Arcosa and United States Lime & Minerals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arcosa	17.90%	7.90%	4.22%
United States Lime & Minerals	35.66%	20.76%	19.24%

Risk & Volatility

Arcosa has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500. Comparatively, United States Lime & Minerals has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Summary

Arcosa beats United States Lime & Minerals on 10 of the 17 factors compared between the two stocks.

About Arcosa

Arcosa, Inc., together with its subsidiaries, provides infrastructure-related products and solutions for the construction, engineered structures, and transportation markets in the United States. It operates through three segments: Construction Products, Engineered Structures, and Transportation Products. The Construction Products segment offers natural and recycled aggregates; specialty materials; and construction site support equipment, including trench shields and shoring products for residential and non-residential construction, and specialty/other products, as well as for infrastructure construction. The Engineered Structures segment offers utility structures, wind towers, traffic structures, and telecommunication structures for electricity transmission and distribution, wind power generation, highway road construction, and wireless communication markets. The Transportation Products segment offers inland barges, fiberglass barge covers, winches, marine hardware, and steel components for railcars and transportation equipment; cast components for industrial and mining sectors; and axles, circular forgings, and coupling devices for freight, tank, locomotive, and passenger rail transportation equipment, as well as other industrial uses. Arcosa, Inc. was incorporated in 2018 and is headquartered in Dallas, Texas.

About United States Lime & Minerals

United States Lime & Minerals, Inc. engages in the manufacture and sale of lime and limestone products. Its products include High Calcium Quicklime, Hydrated Lime, Lime Kiln Dust, Lime Slurry, and High Calcium Limestone. The company was founded in 1948 and is headquartered in Dallas, TX.