Martin Marietta Materials Inc (NYSE: MLM)

Sector: Basic Materials Industry: Building Materials CIK: 0000916076
Market Cap 30.94 Bn
P/B 19.78
P/E 212.27
P/S 13.41
ROIC (Qtr) 8.31
Div Yield % 0.36
Rev 1y % (Qtr) 12.42
Total Debt (Qtr) 5.90 Bn
Debt/Equity (Qtr) 0.61
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About

Martin Marietta Materials Inc. (MLM) is a prominent player in the natural resource-based building materials industry, specializing in aggregates, cement, and downstream products. The company's operations span across aggregates, cement, and downstream products industries, making it a leading supplier of crushed stone, sand, gravel, cement, ready mixed concrete, asphalt, and paving services. MLM's primary business activities revolve around the production and supply of aggregates, which account for a significant portion of the company's revenue. The...

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Investment thesis

Bull case

  • Operating cash flow of 1.84B provides strong 35.42x coverage of stock compensation 52M, indicating sustainable incentive practices.
  • Strong operating cash flow of 1.84B provides 4.05x coverage of SG&A expenses 455M, showing efficient operational cost management.
  • Robust tangible asset base of 14.58B provides 6.43x coverage of working capital 2.27B, indicating strong operational backing.
  • Retained earnings of 6.17B provide full 1.10x coverage of long-term debt 5.61B, indicating strong internal capital position.
  • Tangible assets of 14.58B provide robust 28.37x coverage of other current liabilities 514M, indicating strong asset backing.

Bear case

  • Operating cash flow of 1.84B barely covers its investment activities of (2.59B), with a coverage ratio of -0.71, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 70M against inventory of 1.03B, the 0.07 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating cash flow of 1.84B provides thin coverage of dividend payments of (195M) with a -9.45 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 70M provide limited coverage of acquisition spending of (1.79B), which is -0.04x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 1.64B show weak coverage of depreciation charges of 629M, with a 2.60 ratio indicating high capital intensity and potential reinvestment needs.

Consolidation Items Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Building Materials
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CRH Crh Public Ltd Co 82.74 Bn 24.11 2.24 20.15 Bn
2 VMC Vulcan Materials CO 39.95 Bn 35.72 5.07 4.87 Bn
3 MLM Martin Marietta Materials Inc 30.94 Bn 212.27 13.41 5.90 Bn
4 JHX James Hardie Industries plc 11.15 Bn 93.63 2.53 4.86 Bn
5 EXP Eagle Materials Inc 7.43 Bn 17.29 3.23 1.80 Bn
6 KNF Knife River Corp 5.32 Bn 35.87 1.75 1.24 Bn
7 USLM United States Lime & Minerals Inc 3.38 Bn 216.45 27.53 0.00 Bn
8 TTAM Titan America SA 3.19 Bn 19.19 1.95 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.71 1.41
EV to Cash from Ops. EV/CFO 96.65 23.36
EV to Debt EV to Debt 5.42 58.70
EV to EBIT EV/EBIT 127.85 27.99
EV to EBITDA EV/EBITDA 75.07 17.60
EV to Free Cash Flow [EV/FCF] EV/FCF 226.98 29.87
EV to Market Cap EV to Market Cap 1.03 0.53
EV to Revenue EV/Rev 13.85 4.30
Price to Book Value [P/B] P/B 19.78 5.38
Price to Earnings [P/E] P/E 212.27 46.84
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 5.91 3.00
Dividend Payout Ratio % Div Payout % (Qtr) 16.80 4.53
Dividend per Basic Share Div per Share (Qtr) 3.20 0.43
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 19.16 7.56
Interest Coverage Int. cover (Qtr) 7.37 14.54
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -3.34 -813.53
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -61.96 438.80
Dividend Growth (1y) % Div 1y % (Qtr) 6.31 -5.93
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -36.76 -73.90
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -30.57 -66.06
EBIT Growth (1y) % EBIT 1y % (Qtr) -39.86 -59.38
EBT Growth (1y) % EBT 1y % (Qtr) -44.81 -52.02
EPS Growth (1y) % EPS 1y % (Qtr) -40.88 -67.29
FCF Growth (1y) % FCF 1y % (Qtr) 93.65 -5.79
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 10.86 12.15
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.36 0.55
Cash Payout Ratio Cash Payout (Qtr) 0.07 0.03
Cash Ratio Cash Ratio (Qtr) 0.06 1.32
Current Ratio Curr Ratio (Qtr) 2.97 2.95
Debt to Equity Ratio Debt/Equity (Qtr) 0.61 0.52
Interest Cover Ratio Int Coverage (Qtr) 7.37 14.54
Times Interest Earned Times Interest Earned (Qtr) 7.37 14.54
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 34.10 -43.04
EBIT Margin % EBIT Margin % (Qtr) 24.65 -72.64
EBT Margin % EBT Margin % (Qtr) 21.31 -77.34
Gross Margin % Gross Margin % (Qtr) 29.80 30.03
Net Profit Margin % Net Margin % (Qtr) 17.30 -82.01