NYSE:EXP

Stock Analysis Report

Executive Summary

Eagle Materials Inc., through its subsidiaries, produces and supplies heavy construction materials, light building materials, and materials used for oil and natural gas extraction in the United States.

Rewards

Trading at 39.2% below its fair value

Earnings are forecast to grow 17.41% per year

Risk Analysis

Has a high level of debt

Large one-off items impacting financial results

Profit margins (3.1%) are lower than last year (19.5%)



Snowflake Analysis

Mediocre balance sheet and slightly overvalued.


Similar Companies

Share Price & News

How has Eagle Materials's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: EXP has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.02%

EXP

-2.1%

US Basic Materials

-2.7%

US Market


1 Year Return

32.5%

EXP

35.0%

US Basic Materials

21.2%

US Market

Return vs Industry: EXP underperformed the US Basic Materials industry which returned 42.6% over the past year.

Return vs Market: EXP exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

EXPIndustryMarket
7 Day0.02%-2.1%-2.7%
30 Day4.4%-4.2%0.09%
90 Day2.4%-2.4%6.9%
1 Year33.1%32.5%36.2%35.0%23.8%21.2%
3 Year-8.8%-10.0%4.9%2.4%48.1%38.6%
5 Year24.4%21.5%98.3%89.9%72.5%53.4%

Price Volatility Vs. Market

How volatile is Eagle Materials's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Eagle Materials undervalued compared to its fair value and its price relative to the market?

32.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: EXP ($89.58) is trading below our estimate of fair value ($147.23)

Significantly Below Fair Value: EXP is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: EXP is poor value based on its PE Ratio (92.2x) compared to the Basic Materials industry average (29.5x).

PE vs Market: EXP is poor value based on its PE Ratio (92.2x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: EXP is poor value based on its PEG Ratio (5.3x)


Price to Book Ratio

PB vs Industry: EXP is overvalued based on its PB Ratio (3.7x) compared to the US Basic Materials industry average (2.1x).


Next Steps

Future Growth

How is Eagle Materials forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

18.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EXP's forecast earnings growth (17.4% per year) is above the savings rate (1.7%).

Earnings vs Market: EXP's earnings (17.4% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: EXP's earnings are forecast to grow, but not significantly.

Revenue vs Market: EXP's revenue (4.3% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: EXP's revenue (4.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EXP's Return on Equity is forecast to be low in 3 years time (17.9%).


Next Steps

Past Performance

How has Eagle Materials performed over the past 5 years?

-2.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EXP has a large one-off loss of $220.3M impacting its September 30 2019 financial results.

Growing Profit Margin: EXP's current net profit margins (3.1%) are lower than last year (19.5%).


Past Earnings Growth Analysis

Earnings Trend: EXP's earnings have declined by -2.1% per year over the past 5 years.

Accelerating Growth: EXP's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: EXP had negative earnings growth (-84.5%) over the past year, making it difficult to compare to the Basic Materials industry average (-19.9%).


Return on Equity

High ROE: EXP's Return on Equity (4.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Eagle Materials's financial position?


Financial Position Analysis

Short Term Liabilities: EXP's short term assets ($487.1M) exceed its short term liabilities ($194.8M).

Long Term Liabilities: EXP's short term assets ($487.1M) do not cover its long term liabilities ($1.1B).


Debt to Equity History and Analysis

Debt Level: EXP's debt to equity ratio (95.7%) is considered high.

Reducing Debt: EXP's debt to equity ratio has increased from 34.1% to 95.7% over the past 5 years.

Debt Coverage: EXP's debt is well covered by operating cash flow (37.2%).

Interest Coverage: EXP's interest payments on its debt are well covered by EBIT (8x coverage).


Balance Sheet

Inventory Level: EXP has a high level of physical assets or inventory.

Debt Coverage by Assets: EXP's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is Eagle Materials's current dividend yield, its reliability and sustainability?

0.43%

Current Dividend Yield


Dividend Yield vs Market

company0.4%marketbottom25%1.4%markettop25%3.7%industryaverage0.9%forecastin3Years0.4%

Current dividend yield vs market & industry

Notable Dividend: EXP's dividend (0.45%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: EXP's dividend (0.45%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: EXP is not paying a notable dividend for the US market, therefore no need to check if payments are stable.

Growing Dividend: EXP is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: EXP is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of EXP's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Eagle Materials's salary, the management and board of directors tenure and is there insider trading?

10.4yrs

Average management tenure


CEO

Michael Haack (46yo)

0.5yrs

Tenure

US$2,564,037

Compensation

Mr. Michael R. Haack has been President of Eagle Materials Inc. since August 2018 and its Director since June 19, 2019. He has been Chief Operating Officer of Eagle Materials Inc. since December 2014 and w ...


CEO Compensation Analysis

Compensation vs Market: Michael's total compensation ($USD2.56M) is below average for companies of similar size in the US market ($USD4.99M).

Compensation vs Earnings: Michael's compensation has been consistent with company performance over the past year.


Management Age and Tenure

10.4yrs

Average Tenure

60yo

Average Age

Experienced Management: EXP's management team is seasoned and experienced (10.4 years average tenure).


Board Age and Tenure

4.6yrs

Average Tenure

63yo

Average Age

Experienced Board: EXP's board of directors are considered experienced (4.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$210,62408 Aug 19
Ed Bowman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,492
Max PriceUS$84.52
SellUS$38,229,70030 May 19
Sachem Head Capital Management
EntityCompany
Shares430,000
Max PriceUS$90.04
BuyUS$028 Mar 19
Sachem Head Capital Management
EntityCompany
Shares3,325,000
Max PriceUS$79.54
SellUS$184,86801 Feb 19
Ed Bowman
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,591
Max PriceUS$71.35

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Bob Stewart (65yo)

    Executive Vice President of Strategy

    • Tenure: 10.4yrs
    • Compensation: US$2.08m
  • Gerald Essl (70yo)

    Executive Vice President of Cement

    • Tenure: 17yrs
    • Compensation: US$1.97m
  • James Graass (61yo)

    Executive VP

    • Tenure: 19.2yrs
    • Compensation: US$2.02m
  • Dave Powers (69yo)

    Director & Advisor

    • Tenure: 3.8yrs
    • Compensation: US$5.54m
  • Keith Metcalf (60yo)

    President of American Gypsum Company LLC

    • Tenure: 3.8yrs
    • Compensation: US$1.98m
  • D. Kesler (43yo)

    Executive VP of Finance & Administration and CFO

    • Tenure: 10.4yrs
    • Compensation: US$2.14m
  • William Devlin (53yo)

    Senior VP

    • Tenure: 10.4yrs
    • Compensation: US$653.32k
  • Michael Haack (46yo)

    CEO, President

    • Tenure: 0.5yrs
    • Compensation: US$2.56m
  • Rahul Desai (54yo)

    Senior Vice President of Cement

    • Tenure: 3.8yrs

Board Members

  • Rick Beckwitt (60yo)

    Independent Director

    • Tenure: 5.3yrs
    • Compensation: US$223.80k
  • Ed Bowman (72yo)

    Independent Director

    • Tenure: 8.7yrs
    • Compensation: US$252.32k
  • Margot Carter (51yo)

    Independent Director

    • Tenure: 2.3yrs
    • Compensation: US$284.38k
  • George Damiris (59yo)

    Independent Director

    • Tenure: 3.3yrs
    • Compensation: US$253.21k
  • Marty Ellen (65yo)

    Independent Director

    • Tenure: 6.6yrs
    • Compensation: US$214.51k
  • Mike Nicolais (61yo)

    Chairman of the Board

    • Tenure: 0.8yrs
    • Compensation: US$289.25k
  • F. Barnett (72yo)

    Independent Director

    • Tenure: 16.6yrs
    • Compensation: US$367.10k
  • Rick Stewart (70yo)

    Independent Director

    • Tenure: 13.3yrs
    • Compensation: US$320.19k
  • Dave Powers (69yo)

    Director & Advisor

    • Tenure: 3.8yrs
    • Compensation: US$5.54m
  • Michael Haack (46yo)

    CEO, President

    • Tenure: 0.5yrs
    • Compensation: US$2.56m

Company Information

Eagle Materials Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Eagle Materials Inc.
  • Ticker: EXP
  • Exchange: NYSE
  • Founded: 1963
  • Industry: Construction Materials
  • Sector: Materials
  • Market Cap: US$3.893b
  • Shares outstanding: 41.63m
  • Website: https://www.eaglematerials.com

Number of Employees


Location

  • Eagle Materials Inc.
  • 5960 Berkshire Lane
  • Suite 900
  • Dallas
  • Texas
  • 75225
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
EXPNYSE (New York Stock Exchange)YesCommon StockUSUSDApr 1994
E5MDB (Deutsche Boerse AG)YesCommon StockDEEURApr 1994

Biography

Eagle Materials Inc., through its subsidiaries, produces and supplies heavy construction materials, light building materials, and materials used for oil and natural gas extraction in the United States. It operates in five segments: Cement, Concrete and Aggregates, Gypsum Wallboard, Recycled Paperboard, and Oil and Gas Proppants. The company engages in mining of limestone for the manufacture, production, distribution, and sale of Portland cement and specialty oil well cement; grinding of slag; and mining of gypsum for the manufacture and sale of gypsum wallboards used to finish the interior walls and ceilings in residential, commercial, and industrial structures. It is also involved in the manufacture and sale of recycled paperboard for the gypsum wallboard industry and other paperboard converters, as well as provision of containerboard grade, lightweight packaging grade, and recycled industrial paperboard grade products. In addition, the company engages in the sale of ready-mix concrete; mining, extracting, production, and sale of aggregates, including crushed stones, sand, and gravel, as well as lightweight aggregates, such as expanded clays and shales; and mining and sale of sand used in hydraulic fracturing, such as frac sand. Its products are used in commercial and residential construction; public construction projects; projects to build, expand, and repair roads and highways; and oil and natural gas extraction. The company formerly known as Centex Construction Products, Inc. Eagle Materials Inc. was founded in 1963 and is headquartered in Dallas, Texas. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/29 00:02
End of Day Share Price2020/01/28 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.