Intrinsic value of CRH ADR - CRH

Previous Close

$35.04

  Intrinsic Value

$40.51

stock screener

  Rating & Target

hold

+16%

Previous close

$35.04

 
Intrinsic value

$40.51

 
Up/down potential

+16%

 
Rating

hold

We calculate the intrinsic value of CRH stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  14.68
  16.00
  14.90
  13.91
  13.02
  12.22
  11.50
  10.85
  10.26
  9.74
  9.26
  8.84
  8.45
  8.11
  7.80
  7.52
  7.26
  7.04
  6.83
  6.65
  6.49
  6.34
  6.20
  6.08
  5.97
  5.88
  5.79
  5.71
  5.64
  5.58
  5.52
Revenue, $m
  28,606
  35,120
  40,353
  45,966
  51,951
  58,297
  64,999
  72,049
  79,442
  87,175
  95,249
  103,665
  112,427
  121,541
  131,016
  140,864
  151,097
  161,732
  172,786
  184,278
  196,230
  208,666
  221,610
  235,092
  249,138
  263,781
  279,053
  294,989
  311,625
  329,001
  347,155
Variable operating expenses, $m
 
  30,732
  35,182
  39,955
  45,045
  50,442
  56,141
  62,136
  68,423
  75,000
  81,866
  88,156
  95,607
  103,358
  111,416
  119,790
  128,493
  137,536
  146,936
  156,709
  166,873
  177,448
  188,457
  199,921
  211,866
  224,318
  237,306
  250,858
  265,005
  279,781
  295,220
Fixed operating expenses, $m
 
  1,205
  1,231
  1,259
  1,286
  1,315
  1,343
  1,373
  1,403
  1,434
  1,466
  1,498
  1,531
  1,564
  1,599
  1,634
  1,670
  1,707
  1,744
  1,783
  1,822
  1,862
  1,903
  1,945
  1,988
  2,031
  2,076
  2,122
  2,168
  2,216
  2,265
Total operating expenses, $m
  26,467
  31,937
  36,413
  41,214
  46,331
  51,757
  57,484
  63,509
  69,826
  76,434
  83,332
  89,654
  97,138
  104,922
  113,015
  121,424
  130,163
  139,243
  148,680
  158,492
  168,695
  179,310
  190,360
  201,866
  213,854
  226,349
  239,382
  252,980
  267,173
  281,997
  297,485
Operating income, $m
  2,139
  3,183
  3,940
  4,752
  5,620
  6,541
  7,515
  8,540
  9,616
  10,742
  11,918
  14,011
  15,289
  16,618
  18,002
  19,440
  20,935
  22,489
  24,105
  25,786
  27,535
  29,355
  31,251
  33,226
  35,284
  37,431
  39,671
  42,010
  44,452
  47,004
  49,671
EBITDA, $m
  3,279
  6,711
  7,864
  9,102
  10,424
  11,826
  13,308
  14,867
  16,503
  18,216
  20,004
  21,869
  23,811
  25,831
  27,933
  30,117
  32,388
  34,748
  37,202
  39,754
  42,409
  45,172
  48,049
  51,046
  54,169
  57,426
  60,823
  64,370
  68,073
  71,942
  75,985
Interest expense (income), $m
  365
  517
  696
  888
  1,094
  1,314
  1,547
  1,793
  2,052
  2,323
  2,607
  2,904
  3,213
  3,534
  3,869
  4,217
  4,579
  4,955
  5,345
  5,751
  6,173
  6,612
  7,069
  7,544
  8,039
  8,555
  9,093
  9,653
  10,239
  10,850
  11,488
Earnings before tax, $m
  1,837
  2,666
  3,244
  3,864
  4,526
  5,227
  5,968
  6,747
  7,564
  8,419
  9,311
  11,107
  12,076
  13,084
  14,132
  15,223
  16,356
  17,534
  18,760
  20,035
  21,362
  22,743
  24,182
  25,682
  27,245
  28,876
  30,579
  32,356
  34,213
  36,154
  38,183
Tax expense, $m
  497
  720
  876
  1,043
  1,222
  1,411
  1,611
  1,822
  2,042
  2,273
  2,514
  2,999
  3,261
  3,533
  3,816
  4,110
  4,416
  4,734
  5,065
  5,409
  5,768
  6,141
  6,529
  6,934
  7,356
  7,797
  8,256
  8,736
  9,238
  9,762
  10,309
Net income, $m
  1,312
  1,946
  2,368
  2,821
  3,304
  3,816
  4,357
  4,925
  5,522
  6,146
  6,797
  8,108
  8,815
  9,551
  10,317
  11,112
  11,940
  12,800
  13,695
  14,625
  15,594
  16,603
  17,653
  18,748
  19,889
  21,080
  22,322
  23,620
  24,976
  26,392
  27,874

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,585
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  33,345
  44,065
  50,631
  57,674
  65,183
  73,146
  81,554
  90,400
  99,676
  109,379
  119,510
  130,069
  141,062
  152,498
  164,387
  176,743
  189,583
  202,926
  216,795
  231,214
  246,211
  261,814
  278,056
  294,971
  312,595
  330,967
  350,129
  370,124
  390,998
  412,799
  435,577
Adjusted assets (=assets-cash), $m
  30,760
  44,065
  50,631
  57,674
  65,183
  73,146
  81,554
  90,400
  99,676
  109,379
  119,510
  130,069
  141,062
  152,498
  164,387
  176,743
  189,583
  202,926
  216,795
  231,214
  246,211
  261,814
  278,056
  294,971
  312,595
  330,967
  350,129
  370,124
  390,998
  412,799
  435,577
Revenue / Adjusted assets
  0.930
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
  0.797
Average production assets, $m
  14,001
  26,621
  30,588
  34,842
  39,378
  44,189
  49,269
  54,613
  60,217
  66,079
  72,199
  78,578
  85,219
  92,128
  99,310
  106,775
  114,532
  122,593
  130,972
  139,683
  148,742
  158,169
  167,981
  178,199
  188,847
  199,946
  211,522
  223,602
  236,212
  249,382
  263,144
Working capital, $m
  3,690
  -2,845
  -3,269
  -3,723
  -4,208
  -4,722
  -5,265
  -5,836
  -6,435
  -7,061
  -7,715
  -8,397
  -9,107
  -9,845
  -10,612
  -11,410
  -12,239
  -13,100
  -13,996
  -14,926
  -15,895
  -16,902
  -17,950
  -19,042
  -20,180
  -21,366
  -22,603
  -23,894
  -25,242
  -26,649
  -28,120
Total debt, $m
  8,222
  12,880
  16,438
  20,256
  24,325
  28,641
  33,199
  37,993
  43,021
  48,280
  53,771
  59,494
  65,452
  71,650
  78,094
  84,791
  91,750
  98,982
  106,499
  114,314
  122,442
  130,899
  139,702
  148,870
  158,423
  168,381
  178,766
  189,604
  200,917
  212,733
  225,079
Total liabilities, $m
  18,680
  23,883
  27,442
  31,259
  35,329
  39,645
  44,202
  48,997
  54,024
  59,284
  64,774
  70,497
  76,456
  82,654
  89,098
  95,795
  102,754
  109,986
  117,503
  125,318
  133,446
  141,903
  150,706
  159,874
  169,426
  179,384
  189,770
  200,607
  211,921
  223,737
  236,083
Total equity, $m
  14,665
  20,182
  23,189
  26,415
  29,854
  33,501
  37,352
  41,403
  45,652
  50,096
  54,735
  59,572
  64,607
  69,844
  75,289
  80,948
  86,829
  92,940
  99,292
  105,896
  112,764
  119,911
  127,350
  135,097
  143,168
  151,583
  160,359
  169,517
  179,077
  189,062
  199,494
Total liabilities and equity, $m
  33,345
  44,065
  50,631
  57,674
  65,183
  73,146
  81,554
  90,400
  99,676
  109,380
  119,509
  130,069
  141,063
  152,498
  164,387
  176,743
  189,583
  202,926
  216,795
  231,214
  246,210
  261,814
  278,056
  294,971
  312,594
  330,967
  350,129
  370,124
  390,998
  412,799
  435,577
Debt-to-equity ratio
  0.561
  0.640
  0.710
  0.770
  0.810
  0.850
  0.890
  0.920
  0.940
  0.960
  0.980
  1.000
  1.010
  1.030
  1.040
  1.050
  1.060
  1.070
  1.070
  1.080
  1.090
  1.090
  1.100
  1.100
  1.110
  1.110
  1.110
  1.120
  1.120
  1.130
  1.130
Adjusted equity ratio
  0.395
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,312
  1,946
  2,368
  2,821
  3,304
  3,816
  4,357
  4,925
  5,522
  6,146
  6,797
  8,108
  8,815
  9,551
  10,317
  11,112
  11,940
  12,800
  13,695
  14,625
  15,594
  16,603
  17,653
  18,748
  19,889
  21,080
  22,322
  23,620
  24,976
  26,392
  27,874
Depreciation, amort., depletion, $m
  1,140
  3,528
  3,925
  4,350
  4,804
  5,285
  5,793
  6,327
  6,888
  7,474
  8,086
  7,858
  8,522
  9,213
  9,931
  10,677
  11,453
  12,259
  13,097
  13,968
  14,874
  15,817
  16,798
  17,820
  18,885
  19,995
  21,152
  22,360
  23,621
  24,938
  26,314
Funds from operations, $m
  1,656
  5,474
  6,293
  7,171
  8,108
  9,101
  10,150
  11,253
  12,409
  13,619
  14,883
  15,966
  17,337
  18,764
  20,248
  21,790
  23,393
  25,059
  26,792
  28,594
  30,468
  32,419
  34,451
  36,568
  38,774
  41,074
  43,475
  45,980
  48,597
  51,331
  54,188
Change in working capital, $m
  -814
  -392
  -424
  -455
  -485
  -514
  -543
  -571
  -599
  -626
  -654
  -682
  -710
  -738
  -768
  -798
  -829
  -861
  -895
  -931
  -968
  -1,007
  -1,049
  -1,092
  -1,138
  -1,186
  -1,237
  -1,291
  -1,348
  -1,407
  -1,471
Cash from operations, $m
  2,470
  5,867
  6,717
  7,626
  8,593
  9,615
  10,692
  11,824
  13,008
  14,246
  15,537
  16,648
  18,047
  19,502
  21,015
  22,588
  24,222
  25,921
  27,687
  29,525
  31,436
  33,427
  35,500
  37,660
  39,912
  42,260
  44,712
  47,271
  49,944
  52,738
  55,659
Maintenance CAPEX, $m
  0
  -2,295
  -2,662
  -3,059
  -3,484
  -3,938
  -4,419
  -4,927
  -5,461
  -6,022
  -6,608
  -7,220
  -7,858
  -8,522
  -9,213
  -9,931
  -10,677
  -11,453
  -12,259
  -13,097
  -13,968
  -14,874
  -15,817
  -16,798
  -17,820
  -18,885
  -19,995
  -21,152
  -22,360
  -23,621
  -24,938
New CAPEX, $m
  -900
  -3,668
  -3,967
  -4,255
  -4,536
  -4,811
  -5,080
  -5,344
  -5,604
  -5,862
  -6,120
  -6,379
  -6,641
  -6,909
  -7,182
  -7,465
  -7,757
  -8,061
  -8,379
  -8,711
  -9,060
  -9,426
  -9,812
  -10,219
  -10,647
  -11,099
  -11,576
  -12,079
  -12,610
  -13,170
  -13,761
Cash from investing activities, $m
  -776
  -5,963
  -6,629
  -7,314
  -8,020
  -8,749
  -9,499
  -10,271
  -11,065
  -11,884
  -12,728
  -13,599
  -14,499
  -15,431
  -16,395
  -17,396
  -18,434
  -19,514
  -20,638
  -21,808
  -23,028
  -24,300
  -25,629
  -27,017
  -28,467
  -29,984
  -31,571
  -33,231
  -34,970
  -36,791
  -38,699
Free cash flow, $m
  1,694
  -96
  88
  312
  572
  866
  1,194
  1,553
  1,943
  2,362
  2,809
  3,049
  3,548
  4,072
  4,620
  5,192
  5,787
  6,407
  7,049
  7,716
  8,408
  9,126
  9,871
  10,643
  11,444
  12,276
  13,141
  14,039
  14,974
  15,946
  16,959
Issuance/(repayment) of debt, $m
  -1,493
  3,305
  3,559
  3,817
  4,070
  4,316
  4,557
  4,794
  5,028
  5,259
  5,491
  5,723
  5,958
  6,198
  6,444
  6,697
  6,959
  7,232
  7,517
  7,815
  8,128
  8,457
  8,803
  9,168
  9,552
  9,958
  10,386
  10,837
  11,314
  11,816
  12,346
Issuance/(repurchase) of shares, $m
  51
  840
  639
  405
  135
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -1,456
  4,145
  4,198
  4,222
  4,205
  4,316
  4,557
  4,794
  5,028
  5,259
  5,491
  5,723
  5,958
  6,198
  6,444
  6,697
  6,959
  7,232
  7,517
  7,815
  8,128
  8,457
  8,803
  9,168
  9,552
  9,958
  10,386
  10,837
  11,314
  11,816
  12,346
Total cash flow (excl. dividends), $m
  299
  4,048
  4,286
  4,534
  4,777
  5,182
  5,751
  6,347
  6,971
  7,621
  8,300
  8,772
  9,506
  10,270
  11,064
  11,889
  12,747
  13,639
  14,566
  15,532
  16,537
  17,583
  18,674
  19,811
  20,997
  22,234
  23,527
  24,877
  26,287
  27,762
  29,305
Retained Cash Flow (-), $m
  -929
  -2,786
  -3,007
  -3,226
  -3,439
  -3,647
  -3,851
  -4,051
  -4,248
  -4,444
  -4,640
  -4,836
  -5,035
  -5,237
  -5,445
  -5,659
  -5,881
  -6,111
  -6,352
  -6,604
  -6,868
  -7,146
  -7,439
  -7,747
  -8,072
  -8,415
  -8,776
  -9,158
  -9,560
  -9,985
  -10,433
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  91
  105
  121
  138
  156
  175
  195
  216
  238
  262
  286
  311
  337
  365
  393
  423
  453
  485
  518
  553
  589
  626
  665
  705
  747
  791
  837
  885
  935
  987
Cash available for distribution, $m
 
  1,262
  1,279
  1,309
  1,338
  1,535
  1,900
  2,296
  2,722
  3,177
  3,660
  3,936
  4,471
  5,033
  5,619
  6,230
  6,866
  7,527
  8,214
  8,928
  9,668
  10,437
  11,235
  12,064
  12,925
  13,820
  14,750
  15,719
  16,727
  17,778
  18,873
Discount rate, %
 
  4.40
  4.62
  4.85
  5.09
  5.35
  5.62
  5.90
  6.19
  6.50
  6.83
  7.17
  7.53
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
PV of cash for distribution, $m
 
  1,209
  1,168
  1,135
  1,097
  1,183
  1,369
  1,537
  1,683
  1,802
  1,891
  1,838
  1,872
  1,872
  1,841
  1,780
  1,692
  1,583
  1,457
  1,319
  1,174
  1,027
  883
  745
  617
  501
  399
  310
  237
  176
  128
Current shareholders' claim on cash, %
  100
  97.2
  95.4
  94.4
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1
  94.1

CRH public limited company (CRH plc) is a building materials company. The Company's segments include Europe Heavyside, Europe Lightside, Europe Distribution, Americas Materials, Americas Products, Americas Distribution and Asia. Europe Heavyside segment is engaged in the manufacturing and supply of aggregates, asphalt, cement, readymixed and precast concrete and landscaping products. Europe Lightside segment manufactures and supplies products and solutions for customers in global construction markets. Through its Europe Distribution segment, the Company distributes building materials to professional builders, specialist heating and plumbing contractors, and Do-It-Yourself (DIY) customers. Americas Materials segment is a vertically integrated supplier of aggregates, asphalt, cement, readymixed concrete and paving and construction services. Through Americas Distribution segment, the Company is a distributor of roofing, siding, drywall, ceiling systems and related accessories.

FINANCIAL RATIOS  of  CRH ADR (CRH)

Valuation Ratios
P/E Ratio 22.2
Price to Sales 1
Price to Book 2
Price to Tangible Book
Price to Cash Flow 11.8
Price to Free Cash Flow 18.6
Growth Rates
Sales Growth Rate 14.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -3.3%
Cap. Spend. - 3 Yr. Gr. Rate 11.4%
Financial Strength
Quick Ratio 9
Current Ratio 0
LT Debt to Equity 54.1%
Total Debt to Equity 56.1%
Interest Coverage 6
Management Effectiveness
Return On Assets 4.7%
Ret/ On Assets - 3 Yr. Avg. 4%
Return On Total Capital 5.7%
Ret/ On T. Cap. - 3 Yr. Avg. 4.4%
Return On Equity 9.2%
Return On Equity - 3 Yr. Avg. 7.1%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 32.6%
Gross Margin - 3 Yr. Avg. 30.8%
EBITDA Margin 11.7%
EBITDA Margin - 3 Yr. Avg. 10%
Operating Margin 7.5%
Oper. Margin - 3 Yr. Avg. 5.9%
Pre-Tax Margin 6.4%
Pre-Tax Margin - 3 Yr. Avg. 4.9%
Net Profit Margin 4.6%
Net Profit Margin - 3 Yr. Avg. 3.6%
Effective Tax Rate 27.1%
Eff/ Tax Rate - 3 Yr. Avg. 26.6%
Payout Ratio 28.4%

CRH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CRH stock intrinsic value calculation we used $30276 million for the last fiscal year's total revenue generated by CRH ADR. The default revenue input number comes from 2016 income statement of CRH ADR. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CRH stock valuation model: a) initial revenue growth rate of 16% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.4%, whose default value for CRH is calculated based on our internal credit rating of CRH ADR, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of CRH ADR.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CRH stock the variable cost ratio is equal to 87.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1179 million in the base year in the intrinsic value calculation for CRH stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for CRH ADR.

Corporate tax rate of 27% is the nominal tax rate for CRH ADR. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CRH stock is equal to 0.3%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CRH are equal to 75.8%.

Life of production assets of 10 years is the average useful life of capital assets used in CRH ADR operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CRH is equal to -8.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $17396 million for CRH ADR - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 833 million for CRH ADR is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of CRH ADR at the current share price and the inputted number of shares is $29.2 billion.

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SUM Summit Materia 25.84 27.31  hold

COMPANY NEWS

▶ CRH announces divestment of Benelux DIY business   [Jul-18-18 02:00AM  ACCESSWIRE]
▶ Is CRH plcs (ISE:CRG) ROE Of 12.10% Sustainable?   [Jun-21-18 04:56AM  Simply Wall St.]
▶ CRH Commences Phase 1 of Share Buyback Programme   [May-02-18 02:00AM  ACCESSWIRE]
▶ CRH to pause on major deals for rest of 2018 -CEO   [Apr-26-18 09:12AM  Reuters]
▶ Are CRH plcs (ISE:CRG) Interest Costs Too High?   [04:26AM  Simply Wall St.]
▶ A Look At The Intrinsic Value Of CRH plc (ISE:CRG)   [Mar-16-18 04:31AM  Simply Wall St.]
▶ 2017 Annual Report and Form 20-F   [Mar-09-18 11:52AM  ACCESSWIRE]
▶ CRH Announces Non-Executive Board Appointment   [Mar-01-18 07:30AM  ACCESSWIRE]
▶ [$$] CRH Profit Rises on Europe, Americas Gains   [02:45AM  The Wall Street Journal]
▶ 2017 Full Year Results   [02:00AM  ACCESSWIRE]
▶ ETFs with exposure to CRH Plc : December 14, 2017   [Dec-14-17 01:08PM  Capital Cube]
▶ [$$] CRH Sales Rise 3%   [Nov-21-17 02:53AM  The Wall Street Journal]
▶ Company News For Sep 22, 2017   [Sep-22-17 10:18AM  Zacks]
▶ The 'Trump Trade' Looks Like It's Alive and Well   [Sep-21-17 02:54PM  TheStreet.com]
▶ Is the 'Trump Trade' Alive and Well?   [12:30PM  TheStreet.com]
▶ CRH Cements $3.5 Billion Deal with Ash Grove   [03:54AM  TheStreet.com]
▶ [$$] CRH Unveils $3.5 Billion U.S. Buy   [02:46AM  The Wall Street Journal]
▶ ETFs with exposure to CRH Plc : September 12, 2017   [Sep-11-17 10:27PM  Capital Cube]
▶ ETFs with exposure to CRH Plc : August 31, 2017   [Aug-31-17 05:54PM  Capital Cube]
▶ CRH Shuffles the Deck   [07:09AM  Bloomberg]
▶ CRH PLC Announces Development Update   [02:00AM  Marketwired]
▶ ETFs with exposure to CRH Plc : August 4, 2017   [Aug-03-17 08:03PM  Capital Cube]
▶ CRH PLC: Board change   [Jul-27-17 02:00AM  Marketwired]
▶ ETFs with exposure to CRH Plc : July 13, 2017   [Jul-13-17 03:48PM  Capital Cube]
▶ ETFs with exposure to CRH Plc : June 14, 2017   [Jun-14-17 01:32PM  Capital Cube]
▶ ETFs with exposure to CRH Plc : May 2, 2017   [May-02-17 03:52PM  Capital Cube]
▶ ETFs with exposure to CRH Plc : April 19, 2017   [Apr-19-17 02:17PM  Capital Cube]
▶ ETFs with exposure to CRH Plc : April 5, 2017   [Apr-05-17 04:34PM  Capital Cube]
▶ Is Ventas, Inc. (VTR) A Good Stock To Buy?   [Dec-13-16 11:16AM  Insider Monkey]
▶ Is CBS Corporation (CBS) A Good Stock To Buy?   [Nov-30-16 01:26PM  Insider Monkey]
▶ FTSE 100 ends higher as investors scoop up retailers   [Nov-17-16 12:53PM  at MarketWatch]
Financial statements of CRH
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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