Head to Head Analysis: USG Corporation (USG) versus Martin Marietta Materials (MLM)

USG Corporation (NYSE: USG) and Martin Marietta Materials (NYSE:MLM) are both mid-cap construction companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Profitability

This table compares USG Corporation and Martin Marietta Materials’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
USG Corporation 14.94% 13.57% 6.20%
Martin Marietta Materials 11.19% 10.69% 5.99%

Analyst Ratings

This is a breakdown of recent ratings and price targets for USG Corporation and Martin Marietta Materials, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
USG Corporation 2 10 1 0 1.92
Martin Marietta Materials 0 5 4 0 2.44

USG Corporation currently has a consensus target price of $30.25, indicating a potential downside of 3.11%. Martin Marietta Materials has a consensus target price of $220.57, indicating a potential upside of 9.11%. Given Martin Marietta Materials’ stronger consensus rating and higher probable upside, analysts clearly believe Martin Marietta Materials is more favorable than USG Corporation.

Dividends

Martin Marietta Materials pays an annual dividend of $1.76 per share and has a dividend yield of 0.9%. USG Corporation does not pay a dividend. Martin Marietta Materials pays out 25.3% of its earnings in the form of a dividend.

Insider and Institutional Ownership

87.0% of USG Corporation shares are held by institutional investors. Comparatively, 95.8% of Martin Marietta Materials shares are held by institutional investors. 0.7% of USG Corporation shares are held by company insiders. Comparatively, 8.5% of Martin Marietta Materials shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares USG Corporation and Martin Marietta Materials’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
USG Corporation $3.08 billion 1.45 $487.00 million $3.10 10.07
Martin Marietta Materials $3.72 billion 3.41 $962.24 million $6.96 29.04

Martin Marietta Materials has higher revenue and earnings than USG Corporation. USG Corporation is trading at a lower price-to-earnings ratio than Martin Marietta Materials, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

USG Corporation has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, Martin Marietta Materials has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500.

Summary

Martin Marietta Materials beats USG Corporation on 12 of the 16 factors compared between the two stocks.

USG Corporation Company Profile

USG Corporation, through its subsidiaries, is a manufacturer and distributor of building materials. The Company’s segments include Gypsum, Ceilings and USG Boral Building Products (UBBP). It produces a range of products for use in new residential, new nonresidential, and residential and nonresidential repair and remodel construction, as well as products used in certain industrial processes. Its products are distributed through building materials dealers, home improvement centers and other retailers, specialty wallboard distributors, and contractors. Gypsum segment manufactures and markets gypsum and related products in the United States, Canada, Mexico and Latin America. Ceilings segment manufactures and markets interior systems products in the United States, Canada, Mexico and Latin America. The UBBP segment manufactures, distributes and sells certain building products, mines raw gypsum and sells natural and synthetic gypsum throughout Asia, Australasia and the Middle East.

Martin Marietta Materials Company Profile

Martin Marietta Materials, Inc. is a supplier of aggregates products (crushed stone, sand, and gravel) used for the construction of infrastructure, nonresidential, and residential projects. Aggregates products are also used for railroad ballast and in agricultural, utility and environmental applications. The Company’s Aggregates business operates through three segments: the Mid-America Group, Southeast Group and West Group. The Company’s business is categorized into Aggregates Business, Cement Business and Magnesia Specialties Business. Its Cement business is reported through the Cement segment. Its Magnesia Specialties business manufactures and markets magnesia-based chemical products used in industrial, agricultural, and environmental applications, and dolomitic lime sold to customers in the steel industry. Its Cement business produces Portland and specialty cements. It manufactures and markets, through its Magnesia Specialties business, magnesia-based chemical products.

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