In this article, we will take a look at the 10 best construction materials stocks to buy now.
The New Administration: Implications for the Building Materials and Construction Sector
Donald Trump’s policy agenda including deregulation, tariffs, and tax cuts, has different implications for different investment sectors, according to market experts. As reported by CNBC, the housing and related sectors will be negatively impacted if Trump’s policies of tariffs, tax cuts, and mass deportations drive inflation since the Fed would have to keep the interest rates higher for longer than anticipated which would likely drive mortgage rates up. At the same time, deregulation could be a boosting factor for the industry if it lowers costs for developers and accelerates building timelines. Although Trump plans to open up federal land for building and create tax incentives for homebuyers, there is not much clarity on the front as of now.
It is important to consider that U.S. homebuilder sentiment rose to a seven-month high in November. The National Association of Home Builders/Wells Fargo Housing Market Index rose to 46 in November from 43 in October. Meanwhile, expectations for sales in the next 6 months climbed to the highest since April 2022 after Trump’s win in the election. This was backed up by the optimism regarding more residential construction under the new government. Commenting on the situation, NAHB Chairman Carl Harris, stated:
“With the elections now in the rear view mirror, builders are expressing increasing confidence that Republicans gaining all the levers of power in Washington will result in significant regulatory relief for the industry that will lead to the construction of more homes and apartments”
Although the sentiment around construction has improved, the market continues to be subject to various challenges including elevated materials costs, a limited supply of building lots, and labor shortages. A negative consequence of Trump’s administration could also be the planned deportation of immigrants, considering the fact that the construction market is one of the biggest employers of immigrant workers.
With that being said, let’s move to the 10 best construction materials stocks to buy now.
Our Methodology:
In order to compile a list of the 10 best construction materials stocks to buy now, we first use a stock screener to make an extended list of the relevant companies with the highest market caps. Moving on, we shortlisted the top 10 stocks from our list which had the highest number of hedge fund holders. The 10 best construction materials stocks to buy now have been arranged in ascending order of their hedge fund holders, as of Q3.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Construction Materials Stocks To Buy Now
10. Tecnoglass Inc. (NYSE:TGLS)
Number of Hedge Fund Holders: 10
Tecnoglass Inc. (NYSE:TGLS) is a manufacturer of architectural glass and associated aluminum and vinyl products for the global commercial and residential construction industries. The company was created as the best alternative for the production of tempered, laminated, silk-screened, insulating, curved and digitally printed glass in 1994.
Tecnoglass Inc. (NYSE:TGLS) is one of the largest glass fabricators serving the US and a top architectural glass transformation company in Latin America. It is strategically positioned in the northern end of South America, along the Colombian Caribbean coast. The firm’s vertically integrated model is a key differentiator that enables it to control costs and adapt to market dynamics. Currently, the firm leverages the demand for its best-in-class product offerings, record backlog, established customer relationships, and the benefits of its vertically integrated operations.
The third quarter reflected the strength of the firm’s business in challenging market conditions. The results were commendable with record revenue of $238.3 million, up 13.1% year-over-year, driven entirely by organic growth. Single-family residential revenues rose 25% year-over-year to record levels while multi-family/commercial revenues rose 4.6% year-over-year to near record levels. Demand for the firm’s innovative, high-performance products remained strong across key end markets. The robust quoting and bidding activity for commercial projects supported the firm’s record backlog of $1.04 billion at quarter-end.
Tecnoglass Inc. (NYSE:TGLS) has invested 25 years in redefining glass boundaries. The firm’s vertically integrated operations, innovative product portfolio, and strategic geographic positioning have driven its exceptional track record of growth and profitability.
9. United States Lime & Minerals, Inc. (NASDAQ:USLM)
Number of Hedge Fund Holders: 15
United States Lime & Minerals, Inc. (NASDAQ:USLM) manufactures lime and limestone products, supplying primarily the construction, metals, environmental, oil and gas services, industrial, roof shingle, and agriculture industries. It operates lime and limestone plants and distribution facilities in Arkansas, Colorado, Louisiana, Oklahoma, and Texas through its wholly owned subsidiaries.
United States Lime & Minerals has been competitive in its markets through modernization and expansion as well as development projects in Texas, Arkansas, Oklahoma, and Missouri, Texas slurry operations as well as acquisitions. These projects have also driven fuel-efficient plant facilities with enhanced operating efficiencies and lower production costs. The firm’s customers remain diversified by industry concentration and within its geographic region.
For the third quarter, United States Lime & Minerals, Inc. (NASDAQ:USLM) recorded $89.4 million in revenues, compared to $74.9 million in the prior year period. Lime and limestone revenues were up 19.6% year-over-year. The rise in revenues over the year was driven by an increase in average selling prices for the USLM’s lime and limestone products and more sales volumes principally to the firm’s construction and roof shingle customers.
Although the overall construction demand has been down, USLM witnessed improved demand from its construction customers in the recent quarter since weather conditions in the South-Central US returned to a more normal pattern. United States Lime & Minerals, Inc. (NASDAQ:USLM) ranks among the best construction materials stocks to invest in.
8. CEMEX, S.A.B. de C.V. (NYSE:CX)
Number of Hedge Fund Holders: 18
CEMEX, S.A.B. de C.V. (NYSE:CX) is a leading sustainable construction materials and solutions company. The company has a vertically integrated approach to production and distribution. Its portfolio of products covers the whole construction value chain and focuses on cement, ready-mix concrete, aggregates, and urbanization solutions.
CEMEX, S.A.B. de C.V. (NYSE:CX) recorded a net income growth of more than 200% year-over-year in the third quarter. The higher income was primarily due to a lower effective tax rate and the gain from the sale of the firm’s operations in Guatemala. Meanwhile, adverse weather conditions in all its markets impacted the EBITDA. Some of the favorable demand drivers expected for 2025 and beyond include more visibility into the policy of newly elected governments, US fiscal stimulus and expansionary monetary policy, as well as supportive infrastructure and housing spend.
Therefore, CEMEX, S.A.B. de C.V. (NYSE:CX) is one of the best construction materials stocks to buy now being a leading global supplier of construction materials that has a history of growth and innovation, a strong global presence, and a robust growth strategy.
7. Commercial Metals Company (NYSE:CMC)
Number of Hedge Fund Holders: 19
Commercial Metals Company (NYSE:CMC) provides products and technologies to cater to the critical reinforcement needs of the global construction sector. The firm maintains facilities across the United States, Europe, and Asia. Although CMC’s products are renowned, its vertically integrated business model puts it on the map. The company was the first steel manufacturer to introduce vertical integration in the US. CMC combined the recycling and processing of scrap metals with the blending of processed scrap into new steel and the fabrication of finished steel products which made it revolutionize the steel industry.
CMC is an industry leader. The firm is a key supplier to construction projects across two continents by being among the largest manufacturers of steel reinforcing bars in North America and Central Europe. CMC is also a leader in the steel long products market as it produces merchant bars, steel fence posts, and wire rods.
Commercial Metals Company (NYSE:CMC) closed fiscal 2024 as a solid year. Highlights include the third-best financial results in the firm’s 109-year history and record employee safety performance for the second consecutive year. The fourth quarter results were impacted by macroeconomic and political uncertainty, especially regarding the US interest rates and the outcomes of the election. However, underlying demand fundamentals remain robust due to structural trends of infrastructure investment, electrification, re-shoring of manufacturing, and the need to cater to the housing shortage in the country.
Therefore, Commercial Metals Company (NYSE:CMC) has leading positions in core products and geographies and a vertical structure that optimizes returns through the value chain. As of Q3, the stock is held by 19 hedge funds and ranks among the best construction materials stocks to buy now.
6. Boise Cascade Company (NYSE:BCC)
Number of Hedge Fund Holders: 29
Boise Cascade Company (NYSE:BCC) is a manufacturer and distributor of building materials. The company operates two divisions, Building Materials Distribution and Wood Products Manufacturing. The firm serves diversified customer segments, ranging from independent dealers to large chains and home centers.
Boise Cascade is a leader in the building products industry throughout North America by being among the largest producers of engineered wood products and plywood. An industry-leading scale, strong relationships and distribution rights with leading brands, deep customer relationships, and nationwide distribution capacities are some of the competitive strengths setting the firm apart. Additionally, Boise Cascade’s complementary divisions have been strategically aligned and have demonstrated market share growth together.
Boise Cascade Company (NYSE:BCC) is also seeing favorable demographics including a large cohort entering the homebuying age and a shortage of homes as a result of decades of underbuilding. Furthermore, locked-in low-rate mortgages and record-high home equity levels are driving strength in repair and remodeling. For the third quarter, BCC reported net income of $91.0 million on sales of $1.7 billion. While demand was moderate for the quarter, the financial performance was good with steady execution in both businesses. Home affordability and economic uncertainties constrained demand.
Therefore, Boise Cascade Company (NYSE:BCC) is a leading national provider of essential building materials and has a strong moat supported by a leading national footprint, supplier alignment, logistics expertise, and a trusted brand. As of Q3, the stock is held by 29 hedge funds.
5. Eagle Materials Inc. (NYSE:EXP)
Number of Hedge Fund Holders: 31
Eagle Materials Inc. (NYSE:EXP) is a manufacturer of basic construction materials utilized in residential, commercial, industrial, infrastructure, and energy applications. It has two primary products, Portland Cement and Gypsum Wallboard, which are used for building and repairing roads and highways as well as for building and renovating commercial, residential, and industrial structures. The company manufactures and sells its products through a network of facilities spanning 21 states across the US.
The firm owns virtually all of its raw materials and has relative self-sufficiency with decades of supply located close to its production facilities. With cement being the essential binding material in concrete with few substitutes and the water molecule imbedded in gypsum wallboard chemistry with an inherent fire resistance benefit essential to satisfy US construction specifications, the conditions remain favorable for Eagle Materials Inc. (NYSE:EXP).
For the second quarter of fiscal 2025 ended September 30, Eagle Materials Inc. (NYSE:EXP) witnessed record revenue of $623.6 million although weather conditions were adverse. Revenue in the Light Materials sector which includes Gypsum Wallboard and Paperboard, increased 5% to $244.1 million, due to higher Wallboard and Paperboard sales volume and sales prices. On the other hand, revenue in the Heavy Materials sector which includes Cement, Concrete and Aggregates, Joint Venture, and intersegment Cement revenue, was $418.7 million, a 2% decline, as a result of lower sales volume. The decline was partially offset by higher sales prices and the effects of an Aggregates acquisition during the quarter.
Other than favorable underlying fundamentals, Eagle Materials Inc. (NYSE:EXP) can potentially advantage of the positive economic environment with strong employment, an extreme housing shortage, and spending from the Infrastructure Investment and Jobs Act (IIJA) still in the beginning phases. As of Q3, the stock is held by 31 hedge funds and ranks among the best construction materials stocks to buy now.
4. Knife River Corporation (NYSE:KNF)
Number of Hedge Fund Holders: 33
Knife River Corporation (NYSE:KNF) is an aggregates-based construction materials and services company. The company provides construction materials and contracting services in the western, central, and southern United States. It is vertically integrated with operations spanning 14 states.
Aggregates are the foundation of KNF’s business. The firm serves as one of the nation’s largest construction materials and contracting businesses which has 188 aggregate sites totaling over 1 billion tons of reserves. Other than being a leading supplier of construction materials, KNF performs construction in 12 of its 14 states, through a business mix heavily weighted to public-sector projects. Thus, this combination of products and services has been beneficial for the company over the years.
Third-quarter results remained promising for Knife River Corporation (NYSE:KNF) as it posted record third-quarter revenue, gross profit, and net income. The firm also expects to generate an attractive financial return through acquisitions. KNF has deployed $129.3 million of capital on six acquisitions, with a focus on aggregate reserves and construction materials, through November 2. To drive long-term profitable growth, the company is pursuing the EDGE strategy which refers to EBITDA margin improvement, discipline, growth, and excellence. The strategy remains intact with ongoing growth, pricing optimization, and cost control. With record or near-record budgets at most of its state departments of transportation, KNF is also finding opportunities to bid on projects across its footprint.
Thus, Knife River Corporation (NYSE:KNF) is an aggregates-led, vertically integrated construction materials and contracting services company that is currently favoring a competitive EDGE strategy as well as a strong public funding backdrop.
3. Martin Marietta Materials, Inc. (NYSE:MLM)
Number of Hedge Fund Holders: 44
Martin Marietta Materials, Inc. (NYSE:MLM) is a leading supplier of building materials such as aggregates, cement, ready-mixed concrete, and asphalt. The firm has a network of operations across 28 US states, Canada, and the Bahamas. Martin Marietta Materials also has a Magnesia Specialties business which produces high-purity magnesia and dolomitic lime products used in industrial, agricultural, environmental, and specialty applications worldwide.
Martin Marietta Materials, Inc. (NYSE:MLM) has an aggregates-led business that has been resilient against macroeconomic conditions. The firm benefits from a strategically positioned footprint in the country’s fastest-growing markets. It has a diversified end market exposure which lowers the cyclical demand volatility. The financials have also been strong with total revenues, adjusted EBITDA, and diluted earnings per share rising from 2010 to 2023.
The firm was successful in achieving record quarterly aggregates gross profit per ton in the third quarter despite weather-related events impacting the financial results, product shipments, and geographic mix. Regardless, the firm witnessed record third-quarter cash flows from operations and record third-quarter revenues and gross profit in its Magnesia Specialties business. MLM continues penetrating attractive growing markets as it acquired pure aggregates assets in South Florida and Southern California in October.
Martin Marietta Materials, Inc. (NYSE:MLM) looks forward to benefiting from record levels of federal and state investments in highways, streets, and bridges in 2025 and beyond. The conditions are turning out to be more positive with the Fed rate cuts which are expected to drive a recovery in housing and light nonresidential construction activity. Thus, the company is set to reap the benefits of its resilient aggregates-led business model in the positively forecasted future. As of Q3, the stock is held by 44 hedge funds
2. Vulcan Materials Company (NYSE:VMC)
Number of Hedge Fund Holders: 49
Vulcan Materials Company (NYSE:VMC) is a major producer of aggregates-based construction materials. The company has a history with over 100 years of dedication as it became a publicly traded company with trading starting on January 2, 1957. The company is headquartered in Birmingham, Alabama.
Vulcan is the leading supplier of aggregates which are essential to infrastructure, growth, and construction. The firm is one of the nation’s largest producers of construction aggregates and a major producer of aggregates-based construction materials including asphalt and ready-mixed concrete. Vulcan’s coast-to-coast footprint is unmatched and spans the high-growth US markets.
Vulcan’s focus on aggregates presents it with favorable conditions in the form of a diverse end market demand with aggregates utilized in all kinds of construction, attractive pricing characteristics, limited product substitutions, and high barriers to entry. The demographics are an additional pro as the company serves states that are advantaged for better growth in population, employment, and household.
The firm’s industry-leading aggregates cash gross profit per ton increased 10% in the third quarter, despite lower shipments and harsh weather conditions, and has grown by double-digits for 8 consecutive quarters. Although bad weather impacted construction activity in the first 9 months of the year, overall demand fundamentals are strong, due to growth in public construction activity and an improving private demand environment.
Vulcan Materials Company (NYSE:VMC) has a uniquely positioned aggregates business and an impressive footprint, while market dynamics are positive. With what the firm produces being used in nearly all forms of construction, Vulcan has bright growth prospects to pursue. As of Q3, the stock is held by 49 hedge funds.
1. CRH plc (NYSE:CRH)
Number of Hedge Fund Holders: 80
CRH plc (NYSE:CRH) serves as a leading provider of building materials solutions. The firm is a vertically integrated supplier of aggregates, asphalt, ready-mixed concrete, cement, paving, and construction services. It has a global footprint with operations spanning 28 countries. Its global business operates as two divisions, CRH Americas and CRH Europe. CRH also manufactures high value-added building products for use in residential and non-residential construction projects.
CRH’s unique offering of materials, products, and value-added services makes it an essential partner for road and critical utility infrastructure, commercial building projects, and outdoor living solutions. The firm boasts an unmatched size and scale. It is the largest building materials business in North America, with operations in 48 US states and 7 Canadian provinces. Simultaneously, CRH is a market leader in Europe and has a regional leadership position in Asia. The firm’s products are used in some of the most iconic construction projects across the globe.
CRH plc (NYSE:CRH) demonstrated a robust performance for Q3, with strong double-digit growth in Adjusted EBITDA and EPS despite adverse weather. Total revenues were up 4% over the year. For the upcoming 2025, the firm sees favorable underlying demand across its key end-use markets, driven by significant public investment in infrastructure and re-industrialization activity. Furthermore, a low interest rate environment will enable the recovery of new-build residential construction activity.
CRH plc (NYSE:CRH) is a Fortune 500 company that manufactures a diverse range of superior building materials, products, and solutions used in construction projects globally. The firm is attractively positioned to capture strong growth opportunities across the Americas and internationally. The positive outlook for the future positions the company for growth. As of Q3, the stock is held by 80 hedge funds.
While we acknowledge the potential of CRH as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than CRH but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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