United States Lime & Minerals

United States Lime & Minerals Inc earns a 4-star quantitative star rating, reflecting our opinion that this share class offers a somewhat attractive opportunity for investors. The stock currently trades at a 6% discount to our quantitative fair value estimate of $117.64 per share; however, some caution is warranted due to this estimate's medium uncertainty rating. We require the price/fair value ratio to move a certain amount before the star rating can change. This stability-enhancing buffer is in effect for this stock.

The company's solid growth strengthens our estimated fair value. Consistent revenue and earnings growth indicates a company's potential for increased market share and profitability. Reflecting the firm's growth is its EPS 5-year growth of 28.6%, which falls in the top 10% compared with peers globally. The robust five-year track record of EPS growth is reason to be optimistic about the firm's shares. We believe this is a sign that shares could be cheap.

Alternatively, the company's valuation metrics are potentially concerning. A company's valuation metrics provide insights into the market's expectations for its future growth and profitability. The firm's book value yield of 21.8%, for example, lies in the bottom 20% compared with peers globally. The market value of this company's shares looks expensive relative to the book (accounting) value of equity, which, despite our favorable price/fair value ratio, is a negative attribute.

The company's narrow economic moat rating suggests it should be able to maintain robust profitability for a decade or longer before competition erodes its advantage. Its moat is bolstered by its strong financial health, which indicates low near-term bankruptcy risk.