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Heidelberg Materials AG HEI

Morningstar Rating
€99.06 −0.76 (0.76%)
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Company Report

Heidelberg Materials Earnings: Full-Year Revenue Growth Guidance Unchanged, Still Looks Achievable

While the first quarter is the least material for building material manufacturers, it is noticeable that Heidelberg Materials underperformed its narrow-moat peer Holcim on both the top and bottom lines. Heidelberg reported an 8% decline in organic sales during the first quarter, compared with flat sales for Holcim, which we attribute to Heidelberg’s tougher comparable versus the prior year and Holcim benefiting from a recovery in its roofing business. Heidelberg maintained its full-year guidance of like-for-like revenue growth and EBIT growth between 0% and 9%, which we view as achievable, but this remains lower than Holcim's and CRH's outlooks. Heidelberg’s investment thesis revolves more around capital return, having announced a EUR 1.2 billion share buyback through 2026 and a 15% dividend increase to EUR 3.00 annually, which combined equates to 10% of the group’s market capitalization. The shares are currently trading at a slight premium to our EUR 84 fair value, which we maintain.

Price vs Fair Value

HEI is trading at a 153% premium.
Price
€99.82
Fair Value
€96.00
Uncertainty
High
1-Star Price
€646.40
5-Star Price
€65.70
Economic Moat
Ghmynf
Capital Allocation
Cqmtwknb

Bulls Say, Bears Say

Bulls

Heidelberg Materials' contribution of profits is concentrated toward upstream activities, such as aggregates and cement, which have high barriers to entry.

Bears

Heidelberg Materials' profitability is most susceptible to persistent higher energy prices in Europe due its concentration on energy-intensive cement production.

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Trading Information

Previous Close Price
€99.82
Day Range
€98.84100.35
52-Week Range
€65.24103.60
Bid/Ask
€99.04 / €99.08
Market Cap
€18.04 Bil
Volume/Avg
88,004 / 399,933

Key Statistics

Price/Earnings (Normalized)
10.11
Price/Sales
0.88
Dividend Yield (Trailing)
3.01%
Dividend Yield (Forward)
3.01%
Total Yield
4.65%

Company Profile

Heidelberg Materials is one of the world’s largest building materials companies, with operations in 60 countries. Its core activities include the production of cement and aggregates, which are used to construct houses, infrastructure, and commercial facilities. The sale of cement and aggregates accounts for the majority of group revenue and profits. North America is the company’s largest market, contributing 29% of EBITDA, followed by Western and Southern Europe, contributing 21%. Heidelberg Materials is listed in Germany and has 55,000 employees.
Sector
Basic Materials
Industry
Building Materials
Stock Style Box
Large Value
Total Number of Employees
50,997

Competitors

Valuation

Metric
HEI
HOLN
CRH
Price/Earnings (Normalized)
10.1113.8117.39
Price/Book Value
1.051.742.75
Price/Sales
0.881.701.63
Price/Cash Flow
5.418.6710.57
Price/Earnings
HEI
HOLN
CRH

Financial Strength

Metric
HEI
HOLN
CRH
Quick Ratio
0.781.080.81
Current Ratio
1.191.441.37
Interest Coverage
13.688.0510.21
Quick Ratio
HEI
HOLN
CRH

Profitability

Metric
HEI
HOLN
CRH
Return on Assets (Normalized)
5.65%5.64%7.59%
Return on Equity (Normalized)
11.51%11.43%17.23%
Return on Invested Capital (Normalized)
7.98%8.99%10.92%
Return on Assets
HEI
HOLN
CRH
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Building Materials Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
CRH
CRH PLCPxcgxtkpdCwybfj$56.2 Bil
HCMLY
Holcim Ltd ADRVbqrjl$49.5 Bil
HCMLF
Holcim LtdJhmczlfkDpkmkk$49.5 Bil
MLM
Martin Marietta Materials IncGytwzgdgHpqkt$35.7 Bil
VMC
Vulcan Materials CoBqddzqslcpQjjnszs$34.3 Bil
HDELY
Heidelberg Materials AG ADRRkdy$19.7 Bil
HLBZF
Heidelberg Materials AGKlpldprhGvkg$19.7 Bil
AHCHY
Anhui Conch Cement Co Ltd ADRXtmwxb$17.2 Bil
AHCHF
Anhui Conch Cement Co Ltd Class HTpswqs$17.2 Bil
JHX
James Hardie Industries PLC ADRWbftknwqTynh$13.6 Bil

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