CRH PLC (NYSE:CRH) stands out as a candidate for value investors, scoring well on valuation while maintaining solid fundamentals in profitability, financial health, and growth. The company, a leading manufacturer and distributor of building materials, shows potential as an undervalued opportunity in the construction sector.
Valuation
CRH’s valuation metrics suggest it may be trading below its intrinsic value:
- P/E Ratio (20.00) is lower than 69% of industry peers, indicating relative affordability.
- Forward P/E (14.62) is below both the industry average (16.28) and the S&P 500 (35.33), reinforcing its reasonable pricing.
- Price/Free Cash Flow and EV/EBITDA ratios also suggest the stock is attractively priced compared to competitors.
Financial Health
The company maintains a stable financial position:
- Altman-Z Score (3.06) indicates low bankruptcy risk.
- Debt/Equity (0.68) is manageable, though slightly higher than some peers.
- Current Ratio (1.63) and Quick Ratio (1.07) show sufficient liquidity to meet short-term obligations.
Profitability
CRH demonstrates consistent profitability:
- ROIC (8.69%) exceeds its cost of capital, indicating efficient use of investments.
- Operating Margin (13.66%) has improved in recent years.
- Gross Margin (35.57%) outperforms 85% of industry competitors.
Growth
While not a high-growth stock, CRH shows steady expansion:
- EPS Growth (12.30% CAGR over 5 years) reflects strong earnings performance.
- Revenue Growth (4.80% CAGR) remains stable, with expectations of continued modest increases.
For a deeper look, review the full fundamental analysis of CRH.
Our Decent Value Stocks screener lists more stocks with strong valuations and stable fundamentals.
Disclaimer
This is not investment advice. Always conduct your own research before making investment decisions.
