Is Cemex the Most Undervalued Cement Company in the World?
Cemex's $5B market cap is dwarfed by its $14.5B revenue, suggesting it's heavily undervalued.
Cementos Hidalgo was founded in 1906 in the city of Monterrey with the opening of its first plant. Competitor Cementos Portland Monterrey began operations in 1920. In 1931, the two companies merged, becoming Cementos Mexicanos, or Cemex. The company listed in the Mexican stock market in 1976 and on the NYSE in 1999.
Today, Cemex is one of the largest cement companies in the world. It currently operates in 50+ countries with over 41K employees and has an annual production capacity of 93M metric tons of cement— about 7% of the global cement production.
At the time of writing, the company had a market cap of around $5B — making it the 7th most valuable cement company in the world. The fact that Cemex has such a small market cap and such large revenues ($14.5B, almost 3x their market cap), as compared with other cement companies, could be a signal that Cemex's shares are undervalued.
To illustrate it, we flipped the formula on our chart — a bigger bubble indicates that a company is undervalued. Still, it’s important to note that there may be other factors playing out and revenue shouldn't be taken as the sole indicator of a company's value.
Cemex recently announced its goal of delivering net-zero CO2 concrete globally by 2050. It'll be interesting to see how this strategy plays out and how investors react over time.
This week’s opportunity:
Cemex has hundreds of jobs available throughout LatAm on its careers page. Check them out here.
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