Critical Survey: Vulcan Materials (VMC) versus Smart Sand (NYSE:SND)

Vulcan Materials (NYSE: VMC) and Smart Sand (NYSE:SND) are both construction companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, analyst recommendations, profitabiliy, risk and dividends.

Profitability

This table compares Vulcan Materials and Smart Sand’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Vulcan Materials	11.28%	8.72%	4.48%
Smart Sand	3.87%	2.51%	2.08%

Dividends

Vulcan Materials pays an annual dividend of $1.00 per share and has a dividend yield of 0.8%. Smart Sand does not pay a dividend. Vulcan Materials pays out 32.4% of its earnings in the form of a dividend. Smart Sand has increased its dividend for 3 consecutive years.

Institutional and Insider Ownership

86.0% of Vulcan Materials shares are held by institutional investors. 0.9% of Vulcan Materials shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Vulcan Materials and Smart Sand’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Vulcan Materials	$3.70 billion	4.35	$942.78 million	$3.09	39.43
Smart Sand	$73.93 million	3.46	$25.65 million	N/A	N/A

Vulcan Materials has higher revenue and earnings than Smart Sand.

Analyst Recommendations

This is a summary of current recommendations and price targets for Vulcan Materials and Smart Sand, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Vulcan Materials	0	3	5	0	2.63
Smart Sand	0	3	7	0	2.70

Vulcan Materials presently has a consensus price target of $138.60, suggesting a potential upside of 13.76%. Smart Sand has a consensus price target of $15.53, suggesting a potential upside of 144.53%. Given Smart Sand’s stronger consensus rating and higher possible upside, analysts clearly believe Smart Sand is more favorable than Vulcan Materials.

Summary

Vulcan Materials beats Smart Sand on 10 of the 15 factors compared between the two stocks.

Vulcan Materials Company Profile

Vulcan Materials Company is a supplier of construction aggregates (primarily crushed stone, sand and gravel) and a producer of asphalt mix and ready-mixed concrete. The Company operates through four segments: Aggregates, Asphalt Mix, Concrete and Calcium. The Aggregates segment produces and sells aggregates (crushed stone, sand and gravel, sand, and other aggregates) and related products and services (transportation and other). The Company produces and sells asphalt mix in Arizona, California, New Mexico and Texas. The Company produces and sells ready-mixed concrete in Georgia, Maryland, New Mexico, Texas, Virginia, Washington District of Columbia and the Bahamas. The Calcium segment consists of a Florida facility that mines, produces and sells calcium products. As of December 31, 2016, it had 337 active aggregates facilities. The Company sells aggregates that are used as ballast for construction and maintenance of railroad tracks.

Smart Sand Company Profile

Smart Sand, Inc. is a producer of Northern White raw frac sand, which is a proppant used to enhance hydrocarbon recovery rates in the hydraulic fracturing of oil and natural gas wells. The Company sells its products primarily to oil and natural gas exploration and production companies and oilfield service companies under a combination of long-term take-or-pay contracts and spot sales in the open market. It owns and operates a raw frac sand mine and related processing facility near Oakdale, Wisconsin. In addition to the Oakdale facility, it owns a second property in Jackson County, Wisconsin, known as Hixton site. Its sand reserves include a balanced concentration of coarse (20/40, 30/50 and 40/70 gradation) sands and fine (60/140 gradation) sand. Its reserves contain deposits of approximately 20% of 20/40 and coarser substrate, over 40% of 40/70 mesh substrate and approximately 40% of 100-mesh substrate. Its 30/50 gradation is a derivative of the 20/40 and 40/70 blends.