2 Concrete & Aggregates Stocks to Gain From the Infrastructure Boom

The Concrete & Aggregates industry is projected for multi-year growth through 2026, driven by significant federal and state infrastructure spending from acts like the Infrastructure Investment and Jobs Act, alongside a rebound in private nonresidential construction, particularly data centers and manufacturing. While residential construction remains a weak spot, the sector benefits from solid pricing power due to supply constraints and operational efficiencies, despite facing challenges such as cost inflation and labor shortages. Industry leaders Vulcan Materials (VMC) and Martin Marietta Materials (MLM) are well-positioned, with VMC showing strong EPS growth estimates for 2025-2026, and MLM expecting a 2025 decline before a 2026 recovery, both leveraging robust public project pipelines and strategic execution.

Analysis

The Zacks Building Products - Concrete & Aggregates industry is poised for multi-year growth through 2026, primarily fueled by substantial federal and state infrastructure spending, including the Infrastructure Investment and Jobs Act, and a rebound in private nonresidential construction, particularly data centers and manufacturing facilities. Despite residential construction remaining a weak spot due to affordability pressures, the industry's overall momentum is sustained by robust public project pipelines and solid pricing power, supported by limited quarry supply and high barriers to entry. The industry's Zacks Industry Rank #87 (top 36%) and an increase in 2025 earnings estimates from $2.20 to $2.30 per share since September 2025 underscore this positive outlook.

While the sector faces challenges such as cost inflation, labor constraints, regulatory hurdles, and weather disruptions, operational discipline and efficiency gains are helping to offset these pressures. Over the past year, the industry gained 6.8%, outperforming the broader Zacks Construction sector's 6.9% decline, though it lagged the S&P 500's 17.5% gain. The industry's forward 12-month P/E ratio of 24.06X is slightly above the S&P 500's 23.74X, indicating a premium valuation.

Vulcan Materials (VMC) demonstrates strong growth potential, with 2025 and 2026 EPS estimates projecting 11.8% and 16.5% year-over-year growth, respectively, and a 3-5 year expected EPS growth rate of 14.5%. Its performance is driven by resilient end-market demand, multi-year infrastructure funding, and strategic operational discipline, including divestitures of non-core assets. VMC has consistently surpassed earnings estimates in three of the last four quarters, with an average surprise of 13%.

Martin Marietta Materials (MLM) also benefits from strong infrastructure funding and nonresidential activity, particularly in Sun Belt markets. However, its 2025 EPS and revenue estimates depict a significant decline of 43.3% and 6.5%, respectively, before an anticipated rebound in 2026 with 18.4% EPS growth. MLM's 3-5 year expected EPS growth rate is 5.8%, lower than VMC's, and it has a negative average earnings surprise of 1.5% over the last four quarters.

Key Decisions for Investors

• Investors should consider strategic allocation to the Building Products - Concrete & Aggregates industry, given its strong demand visibility through 2026, driven by federal infrastructure spending and private non-residential construction.
• Evaluate Vulcan Materials (VMC) for its robust earnings growth outlook (11.8% in 2025, 16.5% in 2026) and consistent operational outperformance, positioning it as a potentially strong long-term holding.
• Exercise caution with Martin Marietta Materials (MLM) in the near term due to projected 2025 EPS decline of 43.3%, but monitor its 2026 recovery potential (18.4% EPS growth) and its ability to leverage infrastructure tailwinds.
• Factor in the industry's valuation, currently trading at 24.06X forward P/E, which is slightly above the S&P 500, and assess individual company valuations against their growth prospects and risk factors like input costs and labor shortages.