Fact based stock research
Summit Materials (NYSE:SUM)
US86614U1007
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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Summit Materials stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 4 (worse than 96% compared with investment alternatives), Summit Materials (Construction Materials, USA) shares have lower financial characteristics compared with similar stocks. Shares of Summit Materials are low in value (priced high) with a consolidated Value Rank of 20 (worse than 80% of alternatives), show below-average growth (Growth Rank of 37), and are riskily financed (Safety Rank of 14), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 4, is a sell recommendation based on Summit Materials's financial characteristics. As the company Summit Materials's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 20), low growth (Obermatt Growth Rank of 37), and risky financing practices (Obermatt Safety Rank of 14), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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360° Viewnew| Country | USA |
| Industry | Construction Materials |
| Index | Diversity USA, Low Waste, Recycling |
| Size class | Large |
14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Summit Materials
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 8 |
|
15 |
|
24 |
|
20 |
|
| GROWTH | ||||||||
| GROWTH | 52 |
|
61 |
|
59 |
|
37 |
|
| SAFETY | ||||||||
| SAFETY | 48 |
|
8 |
|
18 |
|
14 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
65 |
|
94 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
23 |
|
34 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 4 (worse than 96% compared with investment alternatives), Summit Materials (Construction Materials, USA) shares have lower financial characteristics compared with similar stocks. Shares of Summit Materials are low in value (priced high) with a consolidated Value Rank of 20 (worse than 80% of alternatives), show below-average growth (Growth Rank of 37), and are riskily financed (Safety Rank of 14), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 4, is a sell recommendation based on Summit Materials's financial characteristics. As the company Summit Materials's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 20), low growth (Obermatt Growth Rank of 37), and risky financing practices (Obermatt Safety Rank of 14), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 8 |
|
15 |
|
24 |
|
20 |
|
| GROWTH | ||||||||
| GROWTH | 52 |
|
61 |
|
59 |
|
37 |
|
| SAFETY | ||||||||
| SAFETY | 48 |
|
8 |
|
18 |
|
14 |
|
| COMBINED | ||||||||
| COMBINED | 16 |
|
16 |
|
12 |
|
4 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 20 (worse than 80% compared with alternatives), Summit Materials shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators where three out of four are below average for Summit Materials. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 54, which means that the stock price is lower compared with invested capital than for 54% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 47 which means the stock price compared with what market professionals expect for future profits is higher than 53% of comparable companies, indicating a low value concerning Summit Materials's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 54 and for the dividend yields rank which is lower than for 99% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 20, is a sell recommendation based on Summit Materials's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Summit Materials, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 28 |
|
46 |
|
48 |
|
47 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 43 |
|
22 |
|
29 |
|
19 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 25 |
|
42 |
|
36 |
|
54 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
1 |
|
1 |
|
1 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 8 |
|
15 |
|
24 |
|
20 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 37 (better than 37% compared with alternatives), Summit Materials shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Summit Materials. Sales Growth has a rank of 50 which means that currently, professionals expect the company to grow more than 50% of its competitors. Both Profit Growth, with a rank of 63, and Stock Returns, with a rank of 63, are also above average. But Capital Growth only has a rank of 11, which means that, currently, professionals expect the company to grow its invested capital less than 89% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 37, is a hold recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 36 |
|
39 |
|
65 |
|
50 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 38 |
|
43 |
|
63 |
|
63 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
42 |
|
32 |
|
11 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 73 |
|
85 |
|
73 |
|
63 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 52 |
|
61 |
|
59 |
|
37 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 14 (better than 14% compared with alternatives), the company Summit Materials has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Summit Materials is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Summit Materials and the other two below average. Refinancing is at 67, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 67% of its competitors. But Leverage is high with a rank of 12, meaning the company has an above-average debt-to-equity ratio. It has more debt than 88% of its competitors. Liquidity is also on the riskier side with a rank of 23, meaning the company generates less profit to service its debt than 77% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 14 (worse than 86% compared with alternatives), Summit Materials has a financing structure that is significantly riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Summit Materials are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Summit Materials and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 40 |
|
14 |
|
24 |
|
12 |
|
| REFINANCING | ||||||||
| REFINANCING | 50 |
|
51 |
|
49 |
|
67 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 48 |
|
17 |
|
22 |
|
23 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 48 |
|
8 |
|
18 |
|
14 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
80 |
|
82 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
23 |
|
55 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
63 |
|
75 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
40 |
|
92 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
65 |
|
94 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Summit Materials from November 14, 2024.
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