Comparing Martin Marietta Materials (NYSE:MLM) and Arcosa (NYSE:ACA)

Arcosa (NYSE:ACA) and Martin Marietta Materials (NYSE:MLM) are both materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Arcosa and Martin Marietta Materials, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arcosa	0	4	3	0	2.43
Martin Marietta Materials	1	9	10	0	2.45

Arcosa currently has a consensus target price of $141.25, indicating a potential downside of 2.88%. Martin Marietta Materials has a consensus target price of $665.88, indicating a potential upside of 31.90%. Given Martin Marietta Materials’ stronger consensus rating and higher possible upside, analysts clearly believe Martin Marietta Materials is more favorable than Arcosa.

Valuation & Earnings

This table compares Arcosa and Martin Marietta Materials”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arcosa	$2.92 billion	2.45	$208.40 million	$9.98	14.57
Martin Marietta Materials	$6.15 billion	4.93	$1.14 billion	$40.70	12.40

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

Dividends

Arcosa pays an annual dividend of $0.20 per share and has a dividend yield of 0.1%. Martin Marietta Materials pays an annual dividend of $3.32 per share and has a dividend yield of 0.7%. Arcosa pays out 2.0% of its earnings in the form of a dividend. Martin Marietta Materials pays out 8.2% 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. Martin Marietta Materials has raised its dividend for 9 consecutive years. Martin Marietta Materials is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Arcosa has a beta of 1.05, suggesting that its share price is 5% more volatile than the S&P 500. Comparatively, Martin Marietta Materials has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Insider and Institutional Ownership

90.7% of Arcosa shares are held by institutional investors. Comparatively, 95.0% of Martin Marietta Materials shares are held by institutional investors. 1.8% of Arcosa shares are held by insiders. Comparatively, 0.7% of Martin Marietta Materials shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Arcosa	17.90%	7.90%	4.22%
Martin Marietta Materials	36.73%	9.49%	5.11%

Summary

Martin Marietta Materials beats Arcosa on 14 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 Martin Marietta Materials

Martin Marietta Materials, Inc., a natural resource-based building materials company, supplies aggregates and heavy-side building materials to the construction industry in the United States and internationally. It offers crushed stone, sand, and gravel products; ready mixed concrete and asphalt; paving products and services; 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. The company also produces magnesia-based chemicals products; dolomitic lime primarily to customers for steel production and soil stabilization; and cement treated materials. Its chemical products are used in flame retardants, wastewater treatment, pulp and paper production, and other environmental applications. The company was founded in 1939 and is headquartered in Raleigh, North Carolina.