Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 stocks made the list for top value stocks in the Construction Materials industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Construction Materials Stock News

Before choosing which top Construction Materials stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

Our fundamental outlook for the construction materials sub-industry for the next 12 months is positive. Expected is elevated construction spending in both the public and private sectors to continue growing. Although economic cycles affect both public and private market sectors, the level of spending on public infrastructure projects has been comparatively more stable due to the predictability of funding from governments at all levels. In recent years, government uncertainty, tight labor markets, and project delays have depressed construction activity. Going forward, however, infrastructure projects will likely broaden in scope, and pricing for aggregates is likely to continue to increase because of restrictions placed on mining. There is significant pent-up demand for infrastructure across the U.S. In addition, U.S. infrastructure (including roads, bridges, water treatment facilities, electrical transmission, and other heavy-duty infrastructure) has been underinvested for many years. As a result, a near-critical mass state where infrastructure spending must improve during the next several years. According to the American Society of Civil Engineers (ASCE), total infrastructure spending needs to amount to $5.9 trillion from 2020-2029 - - of which the ASCE estimates $3.3 trillion as available funding, leaving a $2.6 trillion funding gap. The majority of the funding gap is related to surface transportation ($1.2 trillion), water/ wastewater infrastructure ($434 billion), schools ($380 billion), electricity ($197 billion), and airports ($111 billion).

Why Focus on Undervalued Construction Materials Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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4 Undervalued Construction Materials Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 4 undervalued stocks in the Construction Materials industry for Friday, January 12, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Construction Materials industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Atlas Energy Solutions Inc’s Value Grade

Value Grade:

Atlas Energy Solutions Inc. is a producer of locally sourced 100 mesh and 40/70 sand used as a proppant during the well completion process. The Company's sand reserves are located in Winkler and Ward Counties, Texas, within the Permian Basin and operations consist of proppant production and processing facilities, including one facility near Kermit, Texas (the Kermit facility), a second facility under development at the Kermit location, and a third facility near Monahans, Texas (the Monahans facility). Its Kermit and Monahans facilities have a total combined annual production capacity in excess of 10.0 million tons. The Company is also engaged in operating a logistics platform that is designed to enhance the safety and sustainability of the oil and natural gas industry within the Permian Basin. This includes the Dune Express, an overland conveyor infrastructure solution under construction, coupled with its fleet of fit-for-purpose trucks and trailers.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Atlas Energy Solutions Inc has a Value Score of 90, which is considered to be undervalued.

When you look at Atlas Energy Solutions Inc’s price-to-sales ratio at 1.49 compared to the industry median at 1.98, this company has a lower price relative to revenue compared to its peers. This could make Atlas Energy Solutions Inc’s stock more attractive for value investors.

Atlas Energy Solutions Inc’s price-earnings ratio is 8.84 compared to the industry median at 16.41. This means it has a lower share price relative to earnings compared to its peers. This could make Atlas Energy Solutions Inc more attractive for value investors.

Now, let’s assess Atlas Energy Solutions Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 6.7, when compared to the industry median of 9.0, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Atlas Energy Solutions Inc’s shareholder yield is higher than its industry median ratio of 3.58%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

Cementos Pacasmayo SAA - ADR’s Value Grade

Value Grade:

Pacasmayo Cement Corp, formerly Cementos Pacasmayo SAA, is a Peru-based company principally engaged in the elaboration and manufacture of cements, lime, aggregates, cement blocks and bricks, pre-mixed concrete and sale of construction materials. The Company is active in the development of traditional and blended cement, ready-mix concrete, mortars, quicklime, concrete blocks, diatomite bricks and aggregates, among others. It manages all kind of mining activities exploration, prospecting, development, exploitation, commercialization, general work, beneficiation and transportation. Additionally, the Company provides various services and construction solutions, such as concrete pumping, metal shuttering systems, pavement service and delivery of construction materials. The Company owns a number of subsidiaries around American Latin and other localizations.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Cementos Pacasmayo SAA - ADR has a Value Score of 92, which is considered to be undervalued.

Cementos Pacasmayo SAA - ADR’s price-earnings ratio is 9.2 compared to the industry median at 16.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Cementos Pacasmayo SAA - ADR more attractive for value investors.

Cementos Pacasmayo SAA - ADR’s price-to-book ratio is higher than its peers. This could make Cementos Pacasmayo SAA - ADR less attractive for value investors when compared to the industry median at 2.45.

You can read more about Cementos Pacasmayo SAA - ADR’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Cemex SAB de CV (ADR)’s Value Grade

Value Grade:

Cemex SAB de CV is a Mexico-based operating and holding company primarily engaged, directly or indirectly, through subsidiaries, in the production, distribution, marketing and sale of cement, ready-mix concrete, aggregates, clinker and other globally provided construction materials. The construction-related services supply 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. The cement production facilities are located in Mexico, the United States, Spain, Egypt, Germany, Colombia, the Philippines, Poland, the Dominican Republic, the United Kingdom, Panama, Puerto Rico, Thailand and Nicaragua. The Company is a supplier of aggregates, primarily the crushed stone, sand and gravel, used in various forms of construction.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Cemex SAB de CV (ADR) has a Value Score of 76, which is considered to be undervalued.

Cemex SAB de CV (ADR)’s price-earnings ratio is 25.1 compared to the industry median at 16.4. This means that it has a higher price relative to its earnings compared to its peers. This makes Cemex SAB de CV (ADR) less attractive for value investors.

Cemex SAB de CV (ADR)’s price-to-book ratio is higher than its peers. This could make Cemex SAB de CV (ADR) less attractive for value investors when compared to the industry median at 2.45.

You can read more about Cemex SAB de CV (ADR)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Monarch Cement Co’s Value Grade

Value Grade:

The Monarch Cement Company is engaged in the manufacture and sale of Portland cement. The Company markets its products in various areas, including the State of Kansas, the State of Iowa, southeast Nebraska, western Missouri, northwest Arkansas and northern Oklahoma. Its products are sold to contractors, ready-mixed concrete plants, concrete products plants, building materials dealers and governmental agencies. Its cement is delivered either in bulk or in paper bags and is sold under the MONARCH brand name. The cement is distributed both by truck and rail, either common or private carrier. Its subsidiaries sell ready-mixed concrete, concrete products and sundry building materials in the primary market. It groups its operations into two lines of business, including Cement Business and Ready-Mixed Concrete Business. Its subsidiaries include American Concrete Company, Inc., Beaver Lake Concrete, Inc., Capitol Concrete Products Co., Inc., City Wide Construction Products Co. and others.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Monarch Cement Co has a Value Score of 68, which is considered to be undervalued.

Monarch Cement Co’s price-earnings ratio is 8.9 compared to the industry median at 16.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Monarch Cement Co more attractive for value investors.

Monarch Cement Co’s price-to-book ratio is higher than its peers. This could make Monarch Cement Co less attractive for value investors when compared to the industry median at 2.45.

You can read more about Monarch Cement Co’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Construction Materials Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Construction Materials stocks as well as other industrys.

Choosing Which of the 4 Best Construction Materials Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Atlas Energy Solutions Inc stock has a Value Grade of A.
• Cementos Pacasmayo SAA - ADR stock has a Value Grade of A.
• Cemex SAB de CV (ADR) stock has a Value Grade of B.
• Monarch Cement Co stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 undervalued stocks in the Construction Materials industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Construction Materials Stocks

Want to learn more about Construction Materials stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 4 Undervalued Construction Materials Stocks for Friday, January 12
• What You Need to Know About Atlas Energy Solutions Inc's Q3 Earnings
• What You Need to Know About Cemex SAB de CV (ADR)'s Q3 Earnings
• What You Need to Know About Eagle Materials Inc's Q2 Earnings

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.