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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Martin Marietta Materials, Inc. (XNYS:MLM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MLM
Name:
MARTIN MARIETTA MATERIALS, INC. (XNYS:MLM)
Sector:
30.10M
Industry:
Building Materials
CEO:
Mr. C. Howard Nye
Total Employees:
10,000
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -116.81% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MARTIN MARIETTA MATERIALS, INC.(MLM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BUILDING MATERIALS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
340.6
One Month Price Target:
$342.26
Six Month Price Target :
$350.59
Likely Price in One Year's Time:
Ticker:
$360.57
Likely Trading Range Today Under (Normal Volatility)
$339.34
Price Upper limit ($) :
$342.31
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$322.87
This week:
$300.96
This month :
$261.31
Other Primary facts
Market Cap:
21.18B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
62.37M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.5%
-13.55%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$422.84
$384.95
$258.36
$296.25
Medium risk (<10%) entry points
Buy Call
Sell Call
$372.62
Buy Put:
Sell Put:
$364.53
$308.48
$316.67
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MLM
Sharpe Ratio:
2.21%
Comparison:
MLM, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 5.02% higher than the industry
& is -2.94% lower than the market/S&P 500 average
Average Returns/Yield of
MLM
Daily returns:
0.07%
Weekly returns:
0.33%
Monthly returns:
1.31%
Yearly returns:
16.13%
Comparison of returns:
Average annual returns/yield (last 3 years) is -2.37% below industry average
Classification:
MLM, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.57
Statistical test of Returns:
MLM has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.57%
Weekly Volatility:
5.74%
Monthly Volatility:
11.48%
Yearly Volatility:
39.76%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.39%
Volatility in last five trading days has been -45.77% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.21%
Weekly VaR:
-11.64%
Monthly VaR:
-23.28%
How Much Can the price of
MLM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-20%
Worst case (decline):
-80.64%
This translates to price declining to:
$273.05
This translates to price declining to:
$65.95
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
MLM is a 64.30% riskier investment compared to the market/S&P 500 & is 40.75% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -6.87% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MLM
Beta in relation to market/S&P 500--0.87
Expected beta in 1 year's time:
0.807
Expected beta in 3 year's time:
1.141
Unlevered (debt free) Beta:
0.514
Beta in relation to Nasdaq (XNAS):
0.777
Beta in relation to all global stocks::
0.804
Beta Comparison & Analysis
Beta of competitors/peers::
1.116
Beta is -21.80% lower than peers
Average Industry Beta:
0.907
Beta is -3.81% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
8.89%
Sustainable growth rate is -40.02% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.066
Alpha is -2.14% below industry average alpha yield
Alpha is 422% higher than market/& is unsustainably high
Analysis of Cost of Capital of
MLM
Equity cost of capital:
0.091
Equity cost of capital is -2.53% below industry mean WACC
Unlevered (without debt) cost of capital:
5.37%
Before-tax cost of debt:
2.82%
After-tax cost of debt:
2.23%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.23%
WACC is -11.75% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$90.78
Revenue growth rate per share of (3Y):
3.3
Annual revenue growth rate is -5.49% below industry average
EPS:
$10.52
Expected Annual growth rate of EPS (3Y):
4.69%
Expected future EPS growth rate is -81.36% lower than the Building Materials industry
Free cash flow (FCF) per share:
$10.74
Balance sheet equity growth per share: 27.94%
Equity growth rate per share is -197.35% lower than the industry
Debt per share
$87.61
EBITDA per share
$28.20
Valuation Analysis Today of
MLM
P/E Ratio:
27.02
P/E Ratio of Competitors/Peers:
23.81
P/E ratio is 13.50% higher than main peers & is 23.92% higher than the industry
Stock price/value with industry average P/E ratio: $229.43
MLM is 48.46% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $43.60
Present value of the expected future dividends only: $30.61
P/S (Price to Sales ratio):
3.75
Price to sales ratio is 0.06% above the industry mean
P/B (Price to book value ratio):
3.3
Price to free cash flow: 31.71
Price to free cash flow ratio is 23.76% higher than the industry
Net income growth rate (3Y):
50.65%
Net income growth rate is -8.26% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 5.91%
Dividend yeild: 0.72%
Previous Dividend: $0.61
Previous adjusted dividend: $0.61
Previous Dividend: $2.44
Expected next dividend best case: $0.63
Expected next dividend worst case: $0.59
Average dividend payment (long-term): $0.58
Average dividend increase/decrease (growth rate) % per period: 1.07%
Expected next dividend payment date: 28/09/2022
Expected next dividend record date: 30/08/2022
-
Previous dividend payment date: 30/06/2022
Previous dividend record date: 06/01/2022
-
Dividend History:
2022-05-31--$0.61
2021-11-30--$0.61
2021-05-28--$0.57
2022-02-28--$0.61
2021-08-31--$0.61
2021-02-26--$0.57
Dividend growth rate is -102.65% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
85.00%
Net debt to equity ratio:
82.89%
Debt to assets ratio:
38.37%
Net debt to assets ratio:
37.42%
Debt-to-asset ratio is -3.37% below industry average
Ability to repay debt:
Interest coverage ratio:
11.3
Interest coverage ratio is -78.49% less than industry average
Looking forward:
Debt growth rate:
79.40%
Annual debt growth is 12% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.07%
Analysis of Key Statistics
Correlation of price movement with the market:
0.664
Statistical significance of correlation:
MLM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.612
Stock price is 8.45% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.612
Correlation of price movement with Nasdaq (^IXIC):
0.028
Covariance of price movement with the market:
0.041
Kurtosis
5.124
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.104
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MLM
Gross Profit Margin Ratio:
92%
Operating Profit Margin Ratio:
16.50%
Operating profit margin is 0.52% higher than the industry
Net Profit Margin Ratio:
92%
Effective Tax Rate:
17.80%
Effective tax rate is -13.65% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
10.24%
Return on equity (ROE) is -40.08% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.62%
Return on assets (ROA) is -48.10% lower than the industry
Financial Leverage:
1.6x
Current Ratio:
2.79
Current ratio is 89.92% above industry average
Cash Conversion Cycle (days):
36.9
Cash conversion cycle is 146.36% above industry average
The remaining useful life of property plant & equipment is: 2.2 years
Stock based compensation to net income ratio:
1.82%
In-depth Efficiency Analysis
Revenue generated per employee:
566.2K
Each employee generates -12% less revenue than industry average revenue per employee
EBITDA generated per employee:
175.9K
Each employee generates -15% less EBITDA than industry average revenue per employee
Profit generated per employee:
65.9K
Each employee generates -36% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
3.0K
Each employee generates -79% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.2M
Each employee generates -79% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
MLM
VULCAN MATERIALS COMPANY (XNYS:VMC)
ALBEMARLE CORPORATION (XNYS:ALB)
Franco-Nevada Corporation (XNYS:FNV)
ArcelorMittal SA (XNYS:MTCN)
BARRICK GOLD CORPORATION (XNYS:GOLD)
LyondellBasell Industries NV (XNYS:LYB)
NUCOR CORPORATION (XNYS:NUE)
POSCO Holdings Inc. (XNYS:PKX)
CELANESE CORPORATION (XNYS:CE)
Current Analyst Ratings
Strong buy�25%
Buy�17%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
5.66B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
4.33B
1.33B
-
-
368.30M
-
- 30900.00K
337.40M
-
155.70M
801.30M
1.76B
934.40M
658.60M
804.40M
143.20M
658.60M
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
5.20M
Stock Based Compensation :
12.00M
Change in Working Capital :
7.00M
Accounts Receivables:
14.80M
Other Working Capital:
- 74400.00K
Other Non-Cash Items:
124.40M
Net Cash Provided by Operating Activities:
169.90M
Investments in PP&E:
- 139800.00K
Net Acquisitions:
19.80M
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
189.60M
-
189.60M
759.20M
782.40M
256.30M
1.99B
6.62B
3.39B
1.05B
-
-
1.19B
12.25B
-
14.24B
383.80M
53.80M
-
-
275.30M
712.90M
5.46B
743.10M
7.10B
-
7.81B
600.00K
3.09B
- 129200.0K
3.46B
March 31, 2022 at 6:00:00 AM
4.67B
6.43B
14.24B
-
5.52B
5.3B
-
- 3000.00K
- 123000.00K
- 3700.00K
-
- 74200.00K
- 38900.00K
600.00K
- 116200.00K
-
- 69300.00K
189.60M
258.90M
169.90M
- 139800.00K
30.10M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
MLM
2023
2024
2025
2026
2027
$365.32
$386.74
$409.42
$433.42
$458.84