Comparing Lafargeholcim (OTCMKTS:HCMLY) and Cementos Pacasmayo (CPAC)

Cementos Pacasmayo (NYSE:CPAC) and Lafargeholcim (OTCMKTS:HCMLY) are both construction companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Cementos Pacasmayo and Lafargeholcim, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cementos Pacasmayo 0 2 2 0 2.50
Lafargeholcim 2 1 3 0 2.17

Cementos Pacasmayo presently has a consensus price target of $12.50, suggesting a potential upside of 28.21%. Given Cementos Pacasmayo’s stronger consensus rating and higher probable upside, research analysts clearly believe Cementos Pacasmayo is more favorable than Lafargeholcim.

Dividends

Cementos Pacasmayo pays an annual dividend of $0.51 per share and has a dividend yield of 5.2%. Lafargeholcim pays an annual dividend of $0.37 per share and has a dividend yield of 4.2%. Cementos Pacasmayo pays out 159.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cementos Pacasmayo has raised its dividend for 2 consecutive years. Cementos Pacasmayo is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

4.0% of Cementos Pacasmayo shares are owned by institutional investors. Comparatively, 0.1% of Lafargeholcim shares are owned by institutional investors. 0.2% of Cementos Pacasmayo shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Cementos Pacasmayo and Lafargeholcim’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cementos Pacasmayo 7.94% 5.72% 3.05%
Lafargeholcim N/A N/A N/A

Valuation and Earnings

This table compares Cementos Pacasmayo and Lafargeholcim’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cementos Pacasmayo $376.01 million 2.20 $28.76 million $0.32 30.47
Lafargeholcim $26.55 billion 1.01 -$1.70 billion N/A N/A

Cementos Pacasmayo has higher earnings, but lower revenue than Lafargeholcim.

Risk and Volatility

Cementos Pacasmayo has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, Lafargeholcim has a beta of 1.42, indicating that its share price is 42% more volatile than the S&P 500.

Summary

Cementos Pacasmayo beats Lafargeholcim on 12 of the 16 factors compared between the two stocks.

Cementos Pacasmayo Company Profile

Cementos Pacasmayo S.A.A., a cement company, produces, distributes, and sells cement and cement-related materials in the northern region of Peru. The company operates in three segments: Cement, Concrete and Blocks; Quicklime; and Sales of Construction Supplies. It produces cement for various uses, such as residential and commercial construction, and civil engineering; ready-mix concrete used in large construction sites; concrete blocks, such as paving units or paver stones for pedestrian walkways, as well as other bricks for partition walls and concrete blocks for structural and non-structural uses; and cement based products, including assembly gravity walls, beams and vaults, precast beams, sheet piles, seawalls, and piles, as well as bathroom and housing units. The company also produces and distributes quicklime for use in steel, food, fishing, and chemical industries, as well as mining, agriculture, and other industries. In addition, it distributes other construction materials manufactured by third parties, such as steel rebars, cables, and pipes. The company distributes its cement products and other construction materials manufactured by third parties through a network of 247 independent retailers and 394 hardware stores. Cementos Pacasmayo S.A.A. also sells its cement products directly to other retailers, and to private construction companies and government entities. The company was incorporated in 1949 and is headquartered in Lima, Peru. Cementos Pacasmayo S.A.A. is a subsidiary of Inversiones ASPI S.A.

Lafargeholcim Company Profile

LafargeHolcim Ltd operates as a building materials and solutions company worldwide. It operates in four segments: Cement, Aggregates, Ready-mix Concrete, and Solutions & Products. The company offers cement, clinker, and other cementitious materials; aggregates, such as crushed stone, gravel, and sand; ready-mix concrete, concrete products, asphalt, and other products and services; and construction and paving, and trading services. Its products are used in infrastructure projects, such as transport, roads, energy, and sports and cultural facilities, as well as in the mining industry; and building projects comprising individual housing, collective housing, office buildings, industrial and commercial buildings, and institutional buildings. The company also provides its products for affordable housing, distribution and retail, and oil and gas industries. The company was formerly known as Holcim Ltd. and changed its name to LafargeHolcim Ltd in July 2015. LafargeHolcim Ltd was founded in 1833 and is headquartered in Jona, Switzerland.

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