Summit Materials (NYSE: SUM) and Fairmount Santrol (NYSE:FMSA) are both construction companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, analyst recommendations, profitability, institutional ownership and valuation.
Institutional and Insider Ownership
74.2% of Fairmount Santrol shares are held by institutional investors. 1.5% of Summit Materials shares are held by insiders. Comparatively, 9.8% of Fairmount Santrol shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares Summit Materials and Fairmount Santrol’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Summit Materials||$1.93 billion||1.68||$125.80 million||$0.93||31.24|
|Fairmount Santrol||$959.79 million||1.45||$53.78 million||$0.24||25.75|
Summit Materials has higher revenue and earnings than Fairmount Santrol. Fairmount Santrol is trading at a lower price-to-earnings ratio than Summit Materials, indicating that it is currently the more affordable of the two stocks.
This table compares Summit Materials and Fairmount Santrol’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
Summit Materials has a beta of 1.73, meaning that its share price is 73% more volatile than the S&P 500. Comparatively, Fairmount Santrol has a beta of 2.13, meaning that its share price is 113% more volatile than the S&P 500.
This is a breakdown of current ratings and target prices for Summit Materials and Fairmount Santrol, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Summit Materials presently has a consensus target price of $33.55, indicating a potential upside of 15.49%. Fairmount Santrol has a consensus target price of $6.01, indicating a potential downside of 2.82%. Given Summit Materials’ stronger consensus rating and higher possible upside, research analysts clearly believe Summit Materials is more favorable than Fairmount Santrol.
About Summit Materials
Summit Materials, Inc., together with its subsidiaries, produces and sells construction materials and related downstream products. Its products include aggregates, cement, ready-mix concrete, asphalt paving mixes, and concrete products. The company also provides paving and related services to private and public infrastructure sectors. In addition, it operates municipal waste, construction, and demolition debris landfills; and liquid asphalt terminal. The company operates in the United States, British Columbia, and Canada. Summit Materials, Inc. was founded in 2009 and is headquartered in Denver, Colorado.
About Fairmount Santrol
Fairmount Santrol Holdings Inc., together with its subsidiaries, provides sand-based proppant solutions for exploration and production companies. The company operates in two segments, Proppant Solutions and Industrial & Recreational Products. The Proppant Solutions segment primarily provides sand-based proppants for use in hydraulic fracturing operations in the United States, Canada, Argentina, Mexico, China, and northern Europe. Its products include northern white frac sand, API-spec brown sand, and coated sand products; and Propel SSP product that utilizes a polymer coating applied to a proppant substrate. The Industrial & Recreational Products segment offers raw, coated, and custom blended sands for use in building products, foundry, glass, turf and landscape, and filtration industries primarily in North America. Fairmount Santrol Holdings Inc. also supplies proppants to oilfield service companies. The company was formerly known as FMSA Holdings Inc. and changed its name to Fairmount Santrol Holdings Inc. in July 2015. Fairmount Santrol Holdings Inc. was incorporated in 1986 and is headquartered in Chesterland, Ohio.
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