Critical Review: Smith-Midland (NASDAQ:SMID) and Monarch Cement (OTCMKTS:MCEM)

Insider and Institutional Ownership

49.9% of Smith-Midland shares are owned by institutional investors. 3.9% of Smith-Midland shares are owned by insiders. Comparatively, 26.0% of Monarch Cement shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Smith-Midland and Monarch Cement’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smith-Midland	13.24%	27.32%	16.59%
Monarch Cement	19.56%	12.31%	10.87%

Valuation & Earnings

This table compares Smith-Midland and Monarch Cement”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smith-Midland	$78.51 million	2.38	$7.68 million	$2.27	15.55
Monarch Cement	$268.05 million	3.14	$66.05 million	$16.07	14.31

Monarch Cement has higher revenue and earnings than Smith-Midland. Monarch Cement is trading at a lower price-to-earnings ratio than Smith-Midland, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Smith-Midland has a beta of 1.72, suggesting that its share price is 72% more volatile than the S&P 500. Comparatively, Monarch Cement has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500.

Summary

Monarch Cement beats Smith-Midland on 6 of the 11 factors compared between the two stocks.

About Smith-Midland

Smith-Midland Corporation invents, develops, manufactures, markets, leases, licenses, sells, and installs precast concrete products and systems in the United States. It offers SlenderWall lightweight construction panel, lightweight exterior cladding used for the exterior walls of buildings; Sierra Wall that provides sound and sight barrier for use alongside highways around residential, industrial, and commercial properties; J-J Hooks highway safety barriers, used on roadways to separate lanes of traffic in construction work zone or traffic control purposes; Easi-Set precast building and Easi-Span expandable precast buildings, used in housing communications operations, traffic control systems, and mechanical and electrical stations; Easi-Set utility, vaults for house equipment, such as cable, telephone, or traffic signal equipment, and for underground storage, as well as custom-built utility vaults for special needs; SoftSound soundwall panels, it absorb highway noise; Beach Prisms erosion control modules for seawalls and jetties; and H2Out secondary drainage systems for panelized exterior cladding. It licenses its proprietary products in the United States, Canada, New Zealand, Australia, Belgium, Mexico, and Trinidad. The company markets its products through in-house sales force and independent sales representatives to contractors performing public and private construction contracts, such as construction of commercial buildings, public and private roads and highways, airports, and municipal utilities; and federal, state, and local transportation authorities. It serves its products to construction, highway, utilities, and farming industries. Smith-Midland Corporation was founded in 1960 and is based in Midland, Virginia.

About Monarch Cement

The Monarch Cement Company engages in the manufacture and sale of portland cement in the United States. The company also provides masonry cement, ready-mixed concrete, concrete products, and sundry building materials. It primarily serves contractors, ready-mixed concrete plants, concrete products plants, building materials dealers, and governmental agencies. The company sells its products principally in the State of Kansas, the State of Iowa, southeast Nebraska, western Missouri, northwest Arkansas, and northern Oklahoma. The Monarch Cement Company was founded in 1908 and is based in Humboldt, Kansas.