Concrete stocks can play an important role in your long-term investment portfolio. Many infrastructure projects on both the residential, commercial, and industrial levels need concrete in one form or another. This, in turn, keeps demand for concrete relatively steady.
One way to capture a share of this market in your portfolio is by investing in the companies that make concrete (i.e., the finished product used to repair roads and bridges). You can also invest in companies that make cement – which is the mixture of materials that, when combined with water and other aggregates, make concrete.
However you choose to invest, demand is not likely to be a problem. According to Allied Market Research, the market for concrete is expected to reach $972 billion by 2030. That's up from approximately $617 billion in 2020.
In this article, we'll look at seven companies that cover various aspects of the concrete industry. If you're looking for some foundational stocks for your long-term growth portfolio, these are some names to consider.
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- Vulcan Materials
- CRH
- Martin Marietta Materials
- CEMEX
- Eagle Materials
- HeidelbergCement
- James Hardie Industries
#1 - Vulcan Materials (NYSE:VMC)
Leading off this list of concrete stocks is Vulcan Materials Co. (NYSE: VMC). The company is primarily known as the “nation’s largest producer of construction aggregates” (e.g., crushed stone, sand, and gravel). But the company is also a major producer of ready-mixed concrete.
Vulcan owns and operates ready-mixed concrete facilities in six states in addition the District of Columbia and the U.S. Virgin Islands. The company also has strong relationships with local producers in markets where it doesn’t sell ready-mixed concrete.
Vulcan has a strong cash flow that gives the company the ability to be flexible in its capital spending. And for investors who are looking for companies with strong fundamentals, Vulcan has an investment-grade balance sheet that supports future growth.
In the last five years, VMC stock has climbed over 50%. And in each of those years, Vulcan has increased its dividend. The dividend yield of 0.88% isn’t particularly impressive. But with a payout ratio of 38% and a 3-year growth rate of 8%, it looks to be highly sustainable. The stock has a beta of 0.74.
About Vulcan Materials
Vulcan Materials Company, together with its subsidiaries, produces and supplies construction aggregates primarily in the United States. It operates through four segments: Aggregates, Asphalt, Concrete, and Calcium. The company provides crushed stones, sand and gravel, sand, and other aggregates; and related products and services that are applied in construction and maintenance of highways, streets, and other public works, as well as in the construction of housing and commercial, industrial, and other nonresidential facilities.
Read More - Current Price
- $263.13
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 9 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $284.33 (8.1% Upside)
#2 - CRH (NYSE:CRH)
Next up on this list of concrete stocks to buy is CRH Plc (NYSE: CRH). The company is headquartered in Dublin, Ireland but does business in 29 countries. The company’s portfolio includes some of the world’s most iconic construction projects.
CRH stock is owned by only 5% of institutional investors. Perhaps that’s due to the fact that the company is domiciled outside the U.S., However, of those that own the stock, buyers have significantly outnumbered sellers in the last five quarters ending March 31, 2023.
In 2022, the company generated $32.7 billion from continued operations. This cements its reputation as one of the world’s leading providers of building materials, including cement and ready-made concrete.
CRH stock is up over 31% in the last five years. And that goes along with a semi-annual dividend that has an impressive 4.20% yield. The stock has a beta of 1.13 which means the stock moves in a way that closely approximates the broader market.
About CRH
CRH plc, together with its subsidiaries, provides building materials solutions in Ireland and internationally. It operates through four segments: Americas Materials Solutions, Americas Building Solutions, Europe Materials Solutions, and Europe Building Solutions. The company provides solutions for the construction and maintenance of public infrastructure and commercial and residential buildings; and produces and sells aggregates, cement, readymixed concrete, and asphalt, as well as provides paving and construction services.
Read More - Current Price
- $93.64
- Consensus Rating
- Buy
- Ratings Breakdown
- 12 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $106.42 (13.6% Upside)
#3 - Martin Marietta Materials (NYSE:MLM)
Martin Marietta Materials, Inc. (NYSE: MLM) is a relatively young company, having been established in 1993. Nevertheless, the Raliegh, North Carolina-based company is one of the leading cement and concrete suppliers in the United States. The company’s operations span 26 states in addition to Canada and the Bahamas. The company’s portfolio includes concrete for virtually any application that would be required for infrastructure projects both on land and offshore.
Martin Marietta stock is heavily controlled by the institutions, with the “big money” owning over 90% of the company’s stock. Still, MLM stock is up 77% in the last five years. And in that time, it has continued to increase its dividend. The yield of 0.66% is below the sector average, but it does have a payout of $2.64 and a payout ratio of 17% which makes the dividend highly sustainable. MLM stock carries a beat of 0.87.
About Martin Marietta Materials
Martin Marietta Materials, Inc, a natural resource-based building materials company, supplies aggregates and heavy-side building materials to the construction industry in the United States and internationally. It offers crushed stone, sand, and gravel products; ready mixed concrete and asphalt; paving products and services; and Portland and specialty cement for use in the infrastructure projects, and nonresidential and residential construction markets, as well as in the railroad, agricultural, utility, and environmental industries.
Read More - Current Price
- $533.69
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 14 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $653.08 (22.4% Upside)
#4 - CEMEX (NYSE:CX)
CEMEX SAB de CV (NYSE: CX) may be an appealing option for investors looking for a mid-cap name in this sector. As of May 29, 2023, CEMEX has a market cap of just over $9 billion. Plus, as of that date, the company had a low P/E ratio of just over 10x earnings.
CEMEX is carving out a spot in this sector as a leader in sustainable concrete production. At a time when there’s a heightened awareness of climate change, it may surprise you to know that cement production accounts for approximately 7% of global CO2 emissions. CEMEX is working to reduce that carbon footprint with its Vertua family of products that features “sustainability attributes like energy efficiency, resource efficiency, among others, with a low or neutral CO2 footprint.”.
CX stock is up 5.88% in the last five years and it doesn’t pay a dividend. You’re also getting a little more volatility with CX stock. It has a beta of 1.47. But among concrete stocks, CEMEX may offer investors a higher upside that justifies the added risk.
About CEMEX
CEMEX, SAB. de C.V., together with its subsidiaries, produces, markets, distributes, and sells cement, ready-mix concrete, aggregates, urbanization solutions, and other construction materials and services worldwide. The company offers gray ordinary portland, white portland, oil-well, and blended cement products; mortar; and standard ready-mix, architectural and decorative, rapid-setting, fiber-reinforced, fluid-fill, roller-compacted, self-consolidating, pervious, and antibacterial, and other concrete products.
Read More - Current Price
- $5.65
- Consensus Rating
- Hold
- Ratings Breakdown
- 3 Buy Ratings, 2 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $7.65 (35.4% Upside)
#5 - Eagle Materials (NYSE:EXP)
Another mid-cap stock for investors to consider is Eagle Materials, Inc. (NYSE: EXP). What makes Eagle Materials stand out is that, according to the company, 100% of its concrete and cement is produced in America. At a time when companies are paying close attention to their supply chain, this could be an interesting strategic advantage for the company.
In May 2023, Eagle completed its acquisition of Martin Marietta’s cement import and distribution business in California. This went along with another acquisition in Colorado. These acquisitions are already bolstering the company’s top-line revenue. This may explain why Eagle Materials is a favorite among institutional investors, with over 93% institutional ownership.
EXP stock is up more than 53% in the last five years. Eagle Materials also pays a dividend, albeit a modest one, with a yield of just 0.60%. The stock does carry a beta value of 1.31 which is on the high end of others in its sector.
About Eagle Materials
Eagle Materials Inc, through its subsidiaries, manufactures and sells heavy construction materials and light building materials in the United States. It operates in four segments: Cement, Concrete and Aggregates, Gypsum Wallboard, and Recycled Paperboard. The company engages in the mining of limestone for the manufacture, production, distribution, and sale of Portland cement, including Portland limestone cement; grinding and sale of slag; and mining of gypsum for the manufacture and sale of gypsum wallboards used to finish the interior walls and ceilings in residential, commercial, and industrial structures, as well as well as containerboard and lightweight packaging grades; manufacture and sale of recycled paperboard to the gypsum wallboard industry and other paperboard converters; the sale of readymix concrete; and mining and sale of aggregates, such as crushed stone, sand, and gravel.
Read More - Current Price
- $248.30
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 5 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $304.89 (22.8% Upside)
#6 - HeidelbergCement (OTCMKTS:HDELY)
If you’re looking to give your portfolio some international exposure, HeidelbergCement (OTCMKTS: HDELY) is one to consider. This is a German multinational company that is headquartered in Heidelberg, Germany. The company doesn’t have a large presence in the United States, but it’s still considered to be one of the biggest names among concrete stocks.
Like other companies, HeidlebertCement is committed to manufacturing concrete in an environmentally-responsible way. In fact, in addition to its core operations, the company has built the first industrial-scale carbon capture and storage project at its Norwegian production facility. And in May 2023, the company announced a similar initiative for its Busssc-Foret cement plant in the west of France.
Unlike the other stocks on this list, HDELY stock is down 18% in the last five years. But as of May 29, 2023, the stock has charged ahead nearly 100% since October 2022. And the company pays a dividend with a yield of 2.42%.
About Heidelberg Materials
Heidelberg Materials AG, together with its subsidiaries, produces and distributes cement, aggregates, ready-mixed concrete, and asphalt worldwide. It provides cement products; natural stone aggregates, including sand and gravel; crushed aggregates comprising stone chippings and crushed stones; and ready-mixed concrete for use in the construction of tunnels or bridges, office buildings, or schools, as well as to produce precast concrete parts, such as stairs, ceiling elements, or structural components.
Read More - Current Price
- $24.73
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#7 - James Hardie Industries (NYSE:JHX)
Rounding out this list of concrete stocks to consider is James Hardie Industries Plc (NYSE: JHX). The company has a market cap of right around 11 billion as of this writing. But we’ll still consider it a mid-cap stock for investors to consider.
This is another company that has its headquarters outside of the United States. And like CRH, the company is based in Ireland. It has operations throughout the world, most notably in the United States, Europe, and the Asia-Paciific region. Also, like CRH, the company is basically ignored by institutional investors who own just over 1% of the stock.
Many investors are most familiar with the company’s Hardie Board products, which are durable replacements for exterior wood and other construction materials. The company espouses a “Zero Harm” culture that has a goal of delivering environmentally-responsible innovative solutions to its customers.
JHX stock has been up 45% in the last five years. The company does not pay a dividend, and the stock carries a beta of 1.40.
About James Hardie Industries
James Hardie Industries plc manufactures and sells fiber cement, fiber gypsum, and cement bonded building products for interior and exterior building construction applications primarily in the United States, Australia, Europe, New Zealand, and the Philippines. The company operates through North America Fiber Cement, Asia Pacific Fiber Cement, and Europe Building Products segments.
Read More - Current Price
- $31.68
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 3 Buy Ratings, 0 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $40.25 (27.1% Upside)
As with any sector, concrete can be prone to seasonal weakness. It's also sensitive to macroeconomic conditions. However, overall, this is a stable market that can provide investors with a range of stocks that provide significant value.
That stability is evident in the low beta values that many of these stocks possess. A low-beta stock generally has a lower upside but also carries a lower risk. However, because many of these stocks offer dividends, an investor's total return can often keep pace with the broader market in a bull market and keep a portfolio ahead of inflation when the market corrects.
MarketBeat provides tools that can help you do a deep dive into each of these stocks as part of your due diligence. And if you want to avoid picking individual stocks, there are ETFs that include concrete stocks. You have to be a little discriminating because many don't have a lot of exposure to the sector. One of the best appears to be the Fidelity MSCI Materials Index ETF (NYSEARCA: FMAT).
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