MLM

If You’re Unsure About Politics, Go with Martin Marietta Materials (NYSE:MLM)

For podcast producers and op-ed writers, the vituperative nature of the U.S. political machinery heading into 2024 represents content gold. However, for investors unsure about the political minefield, the dynamic could be a nightmare. Fortunately, we have aggregates and heavy building materials supplier Martin Marietta Materials (NYSE:MLM). No matter who wins the White House, the president must support American workers. Therefore, I am bullish on MLM stock on the natural segue.

No Matter What Happens, MLM Stock (Should) Win

Following the cacophony on Washington, it’s difficult to gauge who might emerge victorious on Nov. 5, 2024. While circumstances may be changing, historically, the incumbent president enjoyed a sizable advantage. However, the latest polls show that President Joe Biden’s disapproval rating has steadily increased to 55.6% at the latest count.

Unfortunately for the Biden administration, despite encouraging disinflationary data, inflation remains too high for the average family. And that opens the door for former President Donald Trump. While Trump courts myriad controversies – including legal challenges that have clouded his candidacy – it’s also fair to point out that he’s incredibly popular with his base.

For investors, though, the passion on both sides of the aisle presents a dilemma. Increasingly (and worryingly), the volume of controversial talking points has only escalated. It’s immensely difficult to find common ground, which is where MLM stock stands on favorable ground.

Should Biden win a second term, he will presumably expand upon his Build Back Better initiative. While the legislation broadly remains in limbo as the Democrats originally sought to include a broader range of social and climate initiatives, it’s important to note that the $1 trillion infrastructure bill passed in the Senate with overwhelming bipartisan approval.

While Americans can bicker like no other about ideological differences, we tend to come together when the issue centers on the almighty dollar. And should Trump ultimately emerge victorious, he may also receive the benefit of the doubt in terms of his directives. Perhaps most notably, Trump’s sharp focus on border security could lead to thousands of jobs created to support new protocols.

Of course, a great many Americans will be unhappy no matter who becomes president. Nevertheless, because both leaders will likely pivot to building up America, MLM stock could be a no-brainer.

Martin Marietta Materials Could Also be Inevitable

Another factor that makes MLM stock intriguing at this political intersection is the struggling infrastructural resilience. To make a long story short, Martin Marietta Materials could represent an inevitability no matter who becomes president.

According to the Council on Foreign Relations, “the $25 trillion U.S. economy relies on a vast network of infrastructure to keep it afloat. But the systems currently in place, including roads, railways, electrical grids, and internet providers, were built decades ago and are struggling to keep pace.”

Further, economists warn that delays and rising maintenance costs stymie economic performance. Additionally, civil engineers have sounded the alarm that “structurally deficient bridges and antiquated water infrastructure pose safety risks.” While these matters are waiting to be addressed, other advanced economies have put up a huge gap in terms of infrastructure quality and spending.

Just like inflation, voters recognize poor infrastructure when they see it. At the most extreme level, deficiencies impose threats to public safety. However, on a lower level, poor roads can lead to car damage. As these smaller-scale frustrations build, they can translate into heightened activity at the polls.

To remedy the situation, both Biden and Trump (or whoever the Democratic and Republican candidates end up being) must bring actionable, relevant policies to the table. Moreover, they must make some tangible effort to see the proposals through. Ultimately, this dynamic should help MLM stock as it’s politically agnostic. Instead, the underlying company is focused on the end result: getting stuff done.

Not Discounted but Predictable

To be 100% fair, the idea of betting on MLM stock is a rather obvious one. That’s part of the reason why shares trade at an elevated trailing-year earnings multiple of 28.92x. In contrast, the sector median valuation is around 22.75x. So, it wouldn’t be accurate to classify the building materials supplier as a bargain.

However, what makes MLM stock viable as a long-term investment is its consistent growth. In 2020, the company suffered a hiccup due to the COVID-19 crisis. However, it was a small hiccup, with revenue coming in at $4.73 billion compared to $4.74 billion a year earlier. However, in 2021, revenue jumped to $5.41 billion and $6.16 billion a year later.

Frankly, MLM stock isn’t going to win because of a discounted profile that other investors don’t see. Rather, it has a history of getting the job done. With a contentious election year coming up, MLM could again benefit from the next president setting a strong infrastructural tone.

Wall Street’s Take on Martin Marietta Materials

Turning to Wall Street, MLM stock has a Strong Buy consensus rating based on 11 Buys, one Hold, and zero Sell ratings. The average MLM price target is $534.30, implying 7.21% upside potential.

The Takeaway: MLM Stock Provides a Political Safety Net

In a politically turbulent period, while Biden's potential focus on infrastructure expansion and Trump's emphasis on border security create winners on both sides, Martin Marietta Materials stands apart. With the addressing of infrastructural vulnerabilities representing a bipartisan initiative, MLM stock offers a political safety net.

Disclosure.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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