In this article, we discuss the 5 best construction materials stocks to invest in right now. To read the details of current economic conditions and their implications on the materials industry, go directly to the 10 Best Construction Materials Stocks To Invest In Right Now.
5. Eagle Materials Inc. (NYSE:EXP)
Number of Hedge Fund Holders: 26
Eagle Materials Inc. (NYSE:EXP) is a manufacturer and seller of heavy construction materials and light building materials through 70 facilities in 21 states. The company’s stock price has gained 20.77% year-to-date, as of April 22.
Eagle Materials Inc. (NYSE:EXP) is among the best construction materials stocks to invest in right now. Based on 6 Wall Street analysts’ ratings in the last three months, Eagle Materials Inc. (NYSE:EXP) has a consensus rating of Strong Buy. The average price target of $283.63 has an upside of 17.15% from the current levels, as of April 22.
In the fourth quarter of 2023, 26 hedge funds had stakes in Eagle Materials Inc. (NYSE:EXP), with total positions worth $143.246 million. With 142,645 shares worth $28.934 million, AQR Capital Management is the top investor in the company as of Q4 2023.
Horizon Kinetics LLC stated the following regarding Eagle Materials Inc. (NYSE:EXP) in its fourth quarter 2023 investor letter:
“One such example, which might lately be found in some strategies, is Eagle Materials Inc. (NYSE:EXP). It is one of the largest U.S. producers of cement and aggregates, as well as gypsum wallboard. Traditionally, cement makers were highly localized businesses, because cement’s high weight/value ratio makes it uneconomic to truck farther than about a 150-mile radius. A new highway or construction project in the area would be profitable, but when that activity ended, the quarry might have to close until the next time. Over many years, Eagle Materials has taken that cyclicality out of the business by acquiring other such companies, even though any single location remains subject to the historically episodic demand in its immediate environs. It now has dozens of facilities throughout the mid-west and into the sunbelt.
The highly local monopolistic characteristics of each location still remain, though, which lends that character to the entire company. And for obvious reasons, it’s unlikely that many more cement plants will be built in this country. Eagle Materials has 25 to 50 years or more of reserves at every location. This is a kind of business that can benefit from a long-term rising price environment.”
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4. Knife River Corporation (NYSE:KNF)
Number of Hedge Fund Holders: 39
Knife River Corporation (NYSE:KNF) is a North Dakota-based provider of aggregates- led construction materials and contracting services. In the quarter, 39 hedge funds held positions in Knife River Corporation (NYSE:KNF) and their stakes amounted to $462.113 million.
On April 10, Loop Capital analyst Garik Shmois raised the price target on Knife River Corporation (NYSE:KNF) to $89 from $81 and kept a Buy rating on the shares.
Longleaf Partners stated the following regarding Knife River Corporation (NYSE:KNF) in its fourth quarter 2023 investor letter:
“Knife River Corporation (NYSE:KNF) – Construction materials and contracting company Knife River was a top contributor for the year and for the quarter. We initiated the position this year after it was spun out of MDU Resources Group, a utility holding company in North Dakota. We were familiar with the business from previous work done on MDU. Knife River was the business that originally attracted us to MDU, and the spin gave us the opportunity to buy the best business as a standalone stock at a discount when utility shareholders focused on a steady dividend dumped it. The business had not been optimized for a long time under MDU but still delivered solid mid-single digit revenue growth over the prior decade. We believe CEO Brian Gray and his plan to improve cash flow represents an improvement over the previous path. Knife River reported strong results in its first two quarters, beating expectations and company guidance.”
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3. Vulcan Materials Company (NYSE:VMC)
Number of Hedge Fund Holders: 41
Vulcan Materials Company (NYSE:VMC) is engaged in the production and supply of construction aggregates. On April 10, Loop Capital analyst Garik Shmois raised the price target on Vulcan Materials Company (NYSE:VMC) to $305 from $295 and maintained a Buy rating on the shares.
Vulcan Materials Company (NYSE:VMC) is among the best construction materials stocks to invest in right now. The stock has a consensus Buy rating among 10 analysts and its average price target of $288.15 implies an upside of 14.32% from the current levels, as of April 22.
In the fourth quarter of 2023, 41 hedge funds had investments in Vulcan Materials Company (NYSE:VMC), with total positions worth $1.77 billion. As of December 31, 2023, Stockbridge Partners is the largest shareholder in the company and has a position worth $467.035 million.
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2. Martin Marietta Materials, Inc. (NYSE:MLM)
Number of Hedge Fund Holders: 52
Martin Marietta Materials, Inc. (NYSE:MLM) is a supplier of aggregates and heavy-side building materials. In the fourth quarter of 2023, 52 hedge funds held positions in Martin Marietta Materials, Inc. (NYSE:MLM), and their total stakes amounted to $2.74 billion. As of the fourth quarter of 2023, Robert Joseph Caruso’s Select Equity Group is the most significant shareholder in the company and has a position worth $1.21 billion.
As of April 22, Martin Marietta Materials, Inc. (NYSE:MLM) has a consensus Buy rating among 12 analysts, and its average price target of $632.86 has an upside of nearly 8.31% from current levels.
Aristotle Capital Management, LLC mentioned Martin Marietta Materials, Inc. (NYSE:MLM) in its first quarter 2024 investor letter:
“Aggregates producer Martin Marietta Materials, Inc. (NYSE:MLM) was a top contributor for the period. As a result of the company’s successful execution of its value-over-volume commercial strategy, including 15% price increases in its aggregates business, Martin Marietta reported full-year records for revenues and profitability. Furthermore, the company continues to bolster its leadership position through the acquisitions of Albert Frei & Sons, a leading aggregates producer in Colorado, and the southeast aggregates operations of Blue Water Industries. These transactions are expected to add one billion tons of reserves, improve product mix and profitability, and allow for the expansion into new target markets such as Nashville and Miami. We believe Martin Marietta is well positioned to continue executing on its catalysts, including optimizing its product portfolio and further enhancing profitability from both pricing and operations initiatives, all while benefiting from continued increases in both non-residential construction and government spending.”
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1. CRH plc (NYSE:CRH)
Number of Hedge Fund Holders: 65
CRH plc (NYSE:CRH) offers building materials solutions and operates through different segments, including Americas Materials Solutions, Americas Building Solutions, Europe Materials Solutions, and Europe Building Solutions. The stock tops our list of best construction materials stocks to invest in right now.
On April 6, CRH plc (NYSE:CRH) reported that the company acquired BoDean Company Inc. and Northgate Ready Mix, LLC. These acquisitions added 2 aggregates quarries, 2 ready-mixed concrete plants, 1 asphalt plant, and 1 recycle plant to the company’s portfolio.
According to our database, CRH plc (NYSE:CRH) was part of 65 hedge funds’ portfolios in Q4 of 2023 with a total stake value of $7.23 billion.
L1 Capital stated the following regarding CRH plc (NYSE:CRH) in its first quarter 2024 investor letter:
“CRH plc (NYSE:CRH) (Long +25%) shares continued to rally strongly after the company delivered strong Q4 FY23 numbers and provided FY24 guidance ~5% ahead of consensus expectations. The company is a significant beneficiary of the exceptional growth in U.S. infrastructure spending which will underpin many years of robust demand. The Infrastructure Investment and Jobs Act (‘IIJA’), Inflation Reduction Act (‘IRA’) and the Chips and Science Act will together add roughly US$2 trillion in investment to ageing U.S. infrastructure. These market tailwinds, together with CRH’s ability to drive value-accretive M&A, position the company to deliver consistent double-digit earnings growth over the medium term.”
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Should you invest $1,000 in CRH plc (NYSE:CRH) right now?
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