In this article, we discuss 5 best cement and construction materials stocks to buy now. If you want to see more stocks in this selection, check out 11 Best Cement and Construction Materials Stocks To Buy Now.
5. Commercial Metals Company (NYSE:CMC)
Number of Hedge Fund Holders: 23
Commercial Metals Company (NYSE:CMC) was founded in 1915 and is headquartered in Irving, Texas. The company primarily manufactures, recycles, and fabricates steel and metal products in the United States, Poland, China, and internationally. On October 13, Commercial Metals Company (NYSE:CMC) posted a FQ4 non-GAAP EPS of $2.45 and a revenue of $2.4 billion, beating market estimates by $0.22 and $40 million, respectively. The company on October 11 also declared a $0.16 per share quarterly dividend, a 14.3% increase from its prior dividend of $0.14. The dividend is payable on November 10, to shareholders of record on October 27.
Citi analyst Alexander Hacking on October 14 raised the price target on Commercial Metals Company (NYSE:CMC) to $44 from $42 and maintained a Neutral rating on the shares after the FQ4 results. The analyst expects Commercial Metals Company (NYSE:CMC)’s results to remain “very strong” in the first half of 2023. The company demonstrated a positive picture on the U.S. construction cycle, the analyst told investors in a research note.
According to Insider Monkey’s data, 23 hedge funds were long Commercial Metals Company (NYSE:CMC) at the end of June 2022, compared to 21 funds in the earlier quarter. Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company, with 2.4 million shares worth nearly $80 million.
Here is what Fairholme Capital Management specifically said about Commercial Metals Company (NYSE:CMC) in its Q2 2022 investor letter:
“Commercial Metals Company (NYSE:CMC) recycles scrap into rebar essential for the strengthening of concrete found everywhere. CMC is priced at five times estimated earnings and pays a 1.6% dividend that I expect to grow with profits. To better understand the Fund’s recent infrastructure investments, I recommend Vaclav Smil’s How the World Really Works.”
4. Steel Dynamics, Inc. (NASDAQ:STLD)
Number of Hedge Fund Holders: 29
Steel Dynamics, Inc. (NASDAQ:STLD) operates as a steel producer and metal recycler in the United States. It operates through three segments – Steel Operations, Metals Recycling Operations, and Steel Fabrication Operations. Steel Dynamics, Inc. (NASDAQ:STLD) reported better than anticipated Q3 adjusted earnings and revenues, and steel shipments came in at a quarterly record of 3.2 million tons. Steel Dynamics, Inc. (NASDAQ:STLD) is one of the best materials stocks to buy now.
On October 21, BMO Capital analyst David Gagliano raised the price target on Steel Dynamics, Inc. (NASDAQ:STLD) to $89 from $77 and reiterated a Market Perform rating on the shares. He is lifting his short-term estimates after Q3 results as downstream fabrication contributions “continue to surprise to the upside.”
According to Insider Monkey’s Q2 data, 29 hedge funds were long Steel Dynamics, Inc. (NASDAQ:STLD), compared to 30 funds in the prior quarter. Cliff Asness’ AQR Capital Management is the biggest stakeholder of the company, with 2.12 million shares worth $137.75 million.
3. Vulcan Materials Company (NYSE:VMC)
Number of Hedge Fund Holders: 34
Vulcan Materials Company (NYSE:VMC) was founded in 1909 and is headquartered in Birmingham, Alabama. The company produces and supplies construction aggregates primarily in the United States, operating through four segments – Aggregates, Asphalt, Concrete, and Calcium. On October 14, Vulcan Materials Company (NYSE:VMC) declared a quarterly dividend of $0.40 per share, in line with previous. The dividend is payable on December 5, to shareholders of record on November 15. It is one of the premier materials stocks to buy now.
DA Davidson analyst Brent Thielman maintained a Buy rating on Vulcan Materials Company (NYSE:VMC) but lowered the price target on the stock to $200 from $205. The analyst attributed his price target change to short-term volume weakness associated with supply constraints, rail operations, and weather, while also citing the potential for positive industry volume expectations. His surveys suggest that optimistic pipelines into 2023 “lend cautious optimism” for Vulcan Materials Company (NYSE:VMC).
According to Insider Monkey’s data, 34 hedge funds were long Vulcan Materials Company (NYSE:VMC) at the end of June 2022, compared to 36 funds in the prior quarter. Sharlyn C. Heslam’s Stockbridge Partners is the biggest position holder in the company, with 2 million shares worth $286.4 million.
Here is what Weitz Investment Management Partners Value Fund has to say about Vulcan Materials Company (NYSE:VMC) in its Q4 2021 investor letter:
“Vulcan Materials contributed to returns due to solid results and a bright outlook for the company’s prosaic, essential products. Aggregate volumes and backlogs are strong across end markets, pricing momentum is robust, and the federal infrastructure bill adds visibility into the amount of money that will be allocated to infrastructure projects.”
2. Trex Company, Inc. (NYSE:TREX)
Number of Hedge Fund Holders: 36
Trex Company, Inc. (NYSE:TREX) is a Virginia-based company that manufactures and distributes decking, railing, and outdoor living products and accessories for residential and commercial markets in the United States. On October 20, Deutsche Bank analyst Joe Ahlersmeyer reiterated a Buy rating on Trex Company, Inc. (NYSE:TREX) but lowered the price target on the shares to $80 from $87. The analyst believes the Q3 earnings season for building products will demonstrate continued robust earnings results and mostly reiterated short-term guidance, but estimates might be revised down for next year.
According to Insider Monkey’s data, 36 hedge funds were bullish on Trex Company, Inc. (NYSE:TREX) at the end of the second quarter of 2022, compared to 38 funds in the earlier quarter. Charles Montanaro’s Montanaro Asset Management is the leading position holder in the company, with 565,000 shares worth $30.7 million.
Here is what Carillon Eagle Small Cap Growth Fund has to say about Trex Company, Inc. (NYSE:TREX) in its Q1 2022 investor letter:
“Trex (NYSE:TREX) manufactures high-performance composite decking and railing products, as well as custom- engineered railing and staging systems, for the commercial and multi-family market. After surging in the prior quarter, the company’s shares declined as rising interest rates weighed a bit on investor sentiment in stocks tied to the housing industry. Despite this, demand for the firm’s products has remained healthy, and we believe Trex should be well positioned to weather any potential downturn in the overall housing industry as its business skews heavily towards repair and remodeling as opposed to new construction.”
1. Martin Marietta Materials, Inc. (NYSE:MLM)
Number of Hedge Fund Holders: 39
Martin Marietta Materials, Inc. (NYSE:MLM) was founded in 1939 and is headquartered in Raleigh, North Carolina. It is a natural resource-based building materials company, providing aggregates and heavy-side building materials to the construction industry in the United States and internationally. On August 10, Martin Marietta Materials, Inc. (NYSE:MLM) declared a $0.66 per share quarterly dividend, an 8.2% increase from its prior dividend of $0.61. The dividend was distributed to shareholders on September 30. Martin Marietta Materials, Inc. (NYSE:MLM) is one of the premier materials stocks to buy now.
On October 12, DA Davidson analyst Brent Thielman maintained a Buy recommendation on Martin Marietta Materials, Inc. (NYSE:MLM) but trimmed the price target on the shares to $385 from $395. The analyst attributed his price target change to near-term volume slowness associated with supply constraints, rail operations, and uncertain weather. He added that his discussions with non-residential contractors suggest that positive pipelines into 2023 “lend cautious optimism” for Martin Marietta Materials, Inc. (NYSE:MLM).
Among the hedge funds tracked by Insider Monkey, Martin Marietta Materials, Inc. (NYSE:MLM) was part of 39 public stock portfolios at the end of Q2 2022, compared to 35 in the prior quarter. Robert Joseph Caruso’s Select Equity Group is the biggest stakeholder of the company, with nearly 4 million shares worth $1.2 billion.
Here is what Diamond Hill Capital Management specifically said about Martin Marietta Materials, Inc. (NYSE:MLM) in its Q2 2022 investor letter:
“Martin Marietta Materials, Inc. (NYSE:MLM) is the second largest aggregates producer and distributor in the US, with competitively positioned cement, ready-mix, asphalt and magnesia specialty businesses. Its share price recently sold off due to concerns about a slowdown in the US residential housing market, giving us the opportunity to initiate a position at an attractive price. We believe Martin Marietta is strategically positioned in markets with strong growth potential, in states that have multi-year department of transportation (DOT) plans approved, and the Infrastructure Investment and Jobs Act (IIJA) will begin distributing funds later this year. Additionally, in the event of an economic downturn, the company has the ability to pull from its prior playbook as a stronger, more geographically diversified player to acquire smaller companies, resulting in better market consolidation.”
You can also take a look at 10 Cheap Defense Stocks To Buy and 10 Best Silver Mining Stocks To Invest In.
