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In today's rapidly changing and fiercely competitive business landscape, it is vital for investors and industry enthusiasts to carefully evaluate companies. In this article, we will perform a comprehensive industry comparison, evaluating Eagle Materials (NYSE:EXP) against its key competitors in the Construction Materials industry. By analyzing important financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
Eagle Materials Inc produces and sells construction products and building materials. Construction products include cement, slag, concrete, and aggregates and building materials include cement and gypsum wallboard, and are sold to the construction and building industries. The firm organizes itself into two sectors: Heavy Materials, which includes the Cement and Concrete and Aggregates segments, and Light Materials, which includes the Gypsum Wallboard and Recycled Paperboard segments.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| Eagle Materials Inc | 16.70 | 5.88 | 3.53 | 5.84% | $0.15 | $0.12 | 1.4% |
| CRH PLC | 17.54 | 2.72 | 1.63 | 0.57% | $0.63 | $1.81 | 1.65% |
| Martin Marietta Materials Inc | 16.33 | 3.86 | 5.17 | 12.36% | $1.58 | $0.27 | -7.61% |
| Vulcan Materials Co | 36.80 | 4.50 | 4.43 | 1.37% | $0.32 | $0.3 | -6.26% |
| James Hardie Industries PLC | 27.73 | 7.47 | 3.59 | 2.96% | $0.15 | $0.41 | 9.49% |
| Summit Materials Inc | 16.89 | 1.58 | 1.68 | -2.05% | $0.08 | $0.18 | 84.9% |
| Knife River Holding Co | 24.42 | 3.54 | 1.51 | -3.83% | $-0.02 | $0.01 | 7.04% |
| United States Lime & Minerals Inc | 26.65 | 5.12 | 7.44 | 5.55% | $0.03 | $0.03 | 7.35% |
| Loma Negra Cia Industria Argentina SA | 18.55 | 1.52 | 1.98 | 12.84% | $115.92 | $29.04 | -27.05% |
| Cementos Pacasmayo SAA | 10.48 | 1.48 | 0.94 | 4.07% | $0.13 | $0.17 | -0.72% |
| Smith-Midland Corp | 85.82 | 4.38 | 2.44 | 3.3% | $0.0 | $0.0 | 30.48% |
| Average | 28.12 | 3.62 | 3.08 | 3.71% | $11.88 | $3.22 | 9.93% |
By analyzing Eagle Materials, we can infer the following trends:
The Price to Earnings ratio of 16.7 is 0.59x lower than the industry average, indicating potential undervaluation for the stock.
It could be trading at a premium in relation to its book value, as indicated by its Price to Book ratio of 5.88 which exceeds the industry average by 1.62x.
The stock's relatively high Price to Sales ratio of 3.53, surpassing the industry average by 1.15x, may indicate an aspect of overvaluation in terms of sales performance.
The Return on Equity (ROE) of 5.84% is 2.13% above the industry average, highlighting efficient use of equity to generate profits.
Compared to its industry, the company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $150 Million, which is 0.01x below the industry average, potentially indicating lower profitability or financial challenges.
The gross profit of $120 Million is 0.04x below that of its industry, suggesting potential lower revenue after accounting for production costs.
The company is witnessing a substantial decline in revenue growth, with a rate of 1.4% compared to the industry average of 9.93%, which indicates a challenging sales environment.
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
By evaluating Eagle Materials against its top 4 peers in terms of the Debt-to-Equity ratio, the following observations arise:
When compared to its top 4 peers, Eagle Materials has a moderate debt-to-equity ratio of 0.86.
This implies that the company maintains a balanced financial structure with a reasonable level of debt and an appropriate reliance on equity financing.
The PE, PB, and PS ratios for Eagle Materials indicate that it may be overvalued compared to its peers in the Construction Materials industry. The high PE and PS ratios suggest that investors are paying a premium for the company's earnings and sales. In contrast, the high ROE, low EBITDA, low gross profit, and low revenue growth of Eagle Materials suggest that the company may be facing challenges in generating profits and revenue efficiently compared to its industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
Posted In: EXP
