7 Best Construction Stocks To Buy According to Analysts

3. Summit Materials, Inc. (NYSE:SUM)

Average Analyst Price Target Upside: 21.12%

Number of Hedge Fund Holders: 24 

Summit Materials, Inc. (NYSE:SUM) is a prominent player in the construction materials industry that specializes in aggregates, cement, ready-mix concrete, and asphalt. The company operates with a vertically integrated model, which allows it to serve a diverse range of markets across the United States and British Columbia, Canada.

It has established itself as a market leader by focusing on high-quality products and services tailored to public infrastructure, residential developments, and non-residential projects such as commercial properties and warehouses.

The company has been on a growth trajectory since its inception, as it has acquired over 80 companies in the construction materials sector. This strategy has enabled it to improve its operational scale and geographical reach. It has around 750 locations in the US and one Canadian province.

In the second quarter, Summit Materials (NYSE:SUM) stock was held by 24 hedge funds, at a combined value of $271.332 million. With 2.75 million shares worth $100.817 million, Millennium Management is the most prominent shareholder of the company, as of June 30.

17 analysts have covered the company and 13 of them maintain a Buy-equivalent rating on the stock. On August 26, The Fly reported that Morgan Stanley analyst Angel Castillo initiated the coverage of Summit Materials (NYSE:SUM) with an Overweight rating and a price target of $51. It takes its place among our best construction stocks to buy according to analysts.

The analyst highlighted several positive factors for investors and noted that the current supply and demand dynamics for cement in the U.S. are “tight” which could benefit the company.

Castillo pointed out the advantages of the company’s vertically integrated structure, which allows for more efficient operations and potentially higher margins.

He also mentioned that the company is well-positioned to capitalize on opportunities in the residential market, which is currently at a low point, as well as the potential for growth through acquisitions.