Why Martin Marietta Materials, Inc. (NYSE:MLM) Could Be Worth Watching

Today we're going to take a look at the well-established Martin Marietta Materials, Inc. (NYSE:MLM). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s examine Martin Marietta Materials’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Martin Marietta Materials

Is Martin Marietta Materials Still Cheap?

According to my valuation model, Martin Marietta Materials seems to be fairly priced at around 14.36% above my intrinsic value, which means if you buy Martin Marietta Materials today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth $399.94, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, Martin Marietta Materials’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Martin Marietta Materials?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by 45% over the next couple of years, the future seems bright for Martin Marietta Materials. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in MLM’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on MLM, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, we've discovered 2 warning signs that you should run your eye over to get a better picture of Martin Marietta Materials.

If you are no longer interested in Martin Marietta Materials, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.