Viking Global Increases Its Wager on Cemex SAB de CV (ADR) (CX)

Martin Marietta Materials, Inc. (NYSE:MLM) also produces and sells aggregates for the construction industry. The company has operations in the United States, Canada, the Bahamas, and the Caribbean islands. The total debt load is only $1.1 billion. Martin Marietta actually pays an annual dividend of $1.60 per share for a yield of 1.5%. The dividend payout ratio is 79%.

Martin Marietta Materials, Inc. (NYSE:MLM) sees improved pricing for the rest of the year helping boost the company’s top and bottom lines. Shipments for aggregates are generally seasonally strong in the second half of the year. As long as construction spending continues to pick up, that’s bullish for the aggregate producers.

At the end of the first quarter, a total of 25 hedge funds were bullish on Martin Marietta Materials and had the stock in their portfolios. Among the holders are Mason Hawkins’ Southeastern Asset Management with 2.1 million shares and John Scully’s SPO Advisory with 1.8 million shares.

Eagle Materials, Inc. (NYSE:EXP) is not only involved in aggregates and cement, but also gypsum wallboard and recycled paperboard. Eagle Materials has been the best performer among the group with a rise of almost 115% in the past year. It is a well-run company with revenue of $642.6 million and net income of $57.7 million last year. The company’s current market cap is $3.5 billion and the total debt load is $489.3 million.

Gypsum wallboard is a great business for Eagle Materials, Inc. (NYSE:EXP). Gypsum wallboard is the primary ingredient in drywall and demand is driven by new home construction. In the first quarter of this year, prices increased 23% from the fourth quarter on robust demand.

The company has five plants to manufacture gypsum wallboard. One of its plants in New Mexico was idled in 2009 due to the housing crisis. As demand for new homes picks up in the American Southwest, look for that plant to come back online and boost sales for Eagle Materials.

What is the Foolish assessment?

I think Andreas Halvorsen’s move into Cemex is a good one. Obviously he sees the global recovery continuing and that will benefit the stocks in this industry. As housing and construction spending pick up, look for the entire sector to strengthen with it.

Mark Yagalla has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Viking Global Increases Its Wager on Cemex originally appeared on Fool.com and is written by Mark Yagalla.

Mark is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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