Cemex SAB de CV (NYSE: CX) and Summit Materials (NYSE:SUM) are both mid-cap basic materials companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.
This table compares Cemex SAB de CV and Summit Materials’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Cemex SAB de CV||8.38%||8.71%||3.10%|
Earnings and Valuation
This table compares Cemex SAB de CV and Summit Materials’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Cemex SAB de CV||$13.40 billion||0.82||$752.16 million||$0.55||13.62|
|Summit Materials||$1.63 billion||2.11||$46.11 million||$0.68||45.87|
Cemex SAB de CV has higher revenue and earnings than Summit Materials. Cemex SAB de CV is trading at a lower price-to-earnings ratio than Summit Materials, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings and target prices for Cemex SAB de CV and Summit Materials, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Cemex SAB de CV||0||3||5||1||2.78|
Cemex SAB de CV currently has a consensus target price of $10.59, suggesting a potential upside of 41.36%. Summit Materials has a consensus target price of $31.50, suggesting a potential upside of 0.99%. Given Cemex SAB de CV’s stronger consensus rating and higher probable upside, equities analysts clearly believe Cemex SAB de CV is more favorable than Summit Materials.
Institutional & Insider Ownership
40.4% of Cemex SAB de CV shares are owned by institutional investors. 1.0% of Cemex SAB de CV shares are owned by company insiders. Comparatively, 2.0% of Summit Materials shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
About Cemex SAB de CV
CEMEX, S.A.B. de C.V. (CEMEX) is an operating and holding company engaged, directly or indirectly, through its operating subsidiaries, primarily in the production, distribution, marketing and sale of cement, ready-mix concrete, aggregates, clinker and other construction materials throughout the world, and that provides construction-related services to customers and communities in over 50 countries throughout the world. The Company operates in various locations, including Mexico, the United States, Europe, South America, Central America, the Caribbean, Asia, the Middle East and Africa. Its cement production facilities are located in Mexico, the United States, Spain, Egypt, Germany, Colombia, the Philippines, Poland, the Dominican Republic, the United Kingdom, Panama, Latvia, Puerto Rico, Thailand, Costa Rica and Nicaragua. The Company is a supplier of aggregates, primarily the crushed stone, sand and gravel, used in various forms of construction.
About Summit Materials
Summit Materials, Inc. is a construction materials company. The Company operates through three segments: West, East and Cement. As of December 31, 2016, the Company had operations in 21 states in the United States and in British Columbia, Canada. The Company’s materials include aggregates, which it supplies across the United States, and in British Columbia, Canada, and cement, which it supplies along the Mississippi River from Minneapolis to New Orleans. Within its markets, it offers construction materials and related downstream products through its vertical integration. In addition to supplying of aggregates to its customers, the Company also uses its materials internally to produce ready-mix concrete and asphalt paving mix. Its construction materials operations consists of aggregates production, including crushed stone and construction sand and gravel, cement and ready-mixed concrete production, and asphalt paving mix production.
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