Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 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.

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.

Click the button below to learn more about A+ Investor and subscribe today.

3 Undervalued Construction Materials Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Construction Materials industry for Monday, March 11, 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 82, which is considered to be undervalued.

When you look at Atlas Energy Solutions Inc’s price-to-sales ratio at 1.88 compared to the industry median at 1.92, 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 12.88 compared to the industry median at 18.62. 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 6.9, when compared to the industry median of 9.9, 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 3.77%. 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.

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 71, which is considered to be undervalued.

Cemex SAB de CV (ADR)’s price-earnings ratio is 62.9 compared to the industry median at 18.6. 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 2.90.

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.

Holcim AG (ADR)’s Value Grade

Value Grade:

Holcim AG is a Switzerland-based company operating in building materials industry. The Company's business segments include Cement, Aggregates, Ready-Mix Concrete and Solutions & Products. Cements division is engaged in sustainable cements and hydraulic binders. Aggregates segment focuses on manufacturing aggregate that is used as raw materials for concrete, masonry, and asphalt as well as base materials for roads, landfills, and buildings. Ready-Mix Concrete includes ready-mix concrete products, self-filling and self-leveling concrete, architectural concrete, insulating concrete and pervious concrete. Solutions & Products offers precast and concrete products for specialty buildings and roofing solutions. The Segment offers also mortars for 3D printing 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.

Holcim AG (ADR) has a Value Score of 70, which is considered to be undervalued.

Holcim AG (ADR)’s price-earnings ratio is 14.0 compared to the industry median at 18.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Holcim AG (ADR) more attractive for value investors.

Holcim AG (ADR)’s price-to-book ratio is higher than its peers. This could make Holcim AG (ADR) less attractive for value investors when compared to the industry median at 2.90.

You can read more about Holcim AG (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.

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 3 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.
• Cemex SAB de CV (ADR) stock has a Value Grade of B.
• Holcim AG (ADR) stock has a Value Grade of B.

Now that you have a bit more background about each of the 3 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.

• 3 Undervalued Construction Materials Stocks for Monday, March 11
• Which Is a Better Investment, Atlas Energy Solutions Inc or Summit Materials Inc Stock?
• Why Cementos Pacasmayo SAA - ADR’s (CPAC) Stock Is Up 6.63%
• Why Atlas Energy Solutions Inc’s (AESI) Stock Is Up 4.60%

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.