4. Martin Marietta Materials, Inc. (NYSE:MLM)
Average Analyst Price Target Upside: 17.57%
Number of Hedge Fund Holders: 45
Martin Marietta Materials, Inc. (NYSE:MLM) is an American company that specializes in the production and distribution of building materials, including aggregates, cement, ready-mixed concrete, and asphalt. The company’s operations run across 28 US states, Canada, the Bahamas, and the Caribbean Islands.
Its product portfolio includes a wide variety of aggregates, such as crushed stone, sand, and gravel, as well as cement, concrete, and magnesia specialties. Its Magnesia Specialties business produces high-purity magnesia and dolomitic lime products used worldwide in environmental, industrial, agricultural, and specialty applications.
Martin Marietta (NYSE: MLM) has been pursuing strategic acquisitions and partnerships to advance its operations and market presence. In 2024, the company strengthened its footprint in the Southeastern U.S. with the acquisitions of Blue Water Industries and Albert Frei & Sons, which enable it to tap into promising new markets in regions such as Tennessee and South Florida.
The integration of these operations has exceeded management’s expectations, with a $7 million contribution to adjusted EBITDA in the second quarter. The company also has a healthy balance sheet with a net debt-to-EBITDA ratio of 2 times, which provides flexibility for future acquisitions and investments.
Martin Marietta (NYSE:MLM) is the 4th best construction stock to buy according to analysts. It has been covered by 23 analysts and 16 of them have a Buy-equivalent rating on it.
One of the latest Buy recommendations for the company was given by Jefferies analyst Philip Ng, as reported by TipRanks on September 6. The analyst has a price target of $650 on Martin Marietta (NYSE:MLM).
Baron Real Estate Fund stated the following regarding Martin Marietta Materials, Inc. (NYSE:MLM) in its Q2 2024 investor letter:
“In the second quarter, we acquired shares in Martin Marietta Materials, Inc. (NYSE:MLM), a leading producer of aggregates (77% of gross profit) and specialty products. The company’s products are sold and utilized in infrastructure projects such as highways, as well as residential and non-residential construction. Martin Marietta has local leadership positions across its footprint.
We believe aggregates are an attractive business for two main reasons: High barriers to entry limit new competition: Permits to open new quarries are difficult to obtain, and the approval process typically takes 5 to 10 years. Martin Marietta has more than 75 years of aggregates reserves at its current extraction rates. Consistent pricing power through cycles: Aggregates producers have historically enjoyed great pricing power owing to the difficulty in opening competing new quarries, the limited substitutes for quality aggregates, and a high weight-to-price ratio that makes transportation expensive relative to the cost of the material. In the last 30 years, pricing of aggregates has increased, on average, 4% per year…” (Click here to read the full text)
