Is this the only Irish stock worth buying?

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MiningBack in December, three more foreign firms joined the FTSE 100. Two were Russian miners, Evraz and Polymetal -- and I've long made my views clear on the dubious charms of such businesses for 'play safe' index-tracker investors.

But the third was CRH, a name that I'm betting won't be familiar to you. In fact, it's a decent business, headquartered in Ireland, that happens to be one of the world's biggest suppliers in its market.


What's more, it's actually Ireland's single biggest quoted business -- although that statistic doubtless owes at least something to the self-immolatory tendencies of Ireland's financial sector in recent times. And last year, the company transferred its main listing from Dublin to London.


Today, FTSE 100-listed CRH has released its final results for 2011. I thought I'd take a look.

International footprint

Before diving into the detail of those results, let's take a quick look at CRH itself.

Simply put, it's a buildings materials supplier of such things as aggregates, ready-mixed concrete and cement. And one reason why you many not be familiar with its name is because its operations in the UK amount to zero. Nothing: not even a pebble.

Elsewhere, though, the business is a fairly hefty player. Its European materials division, for instance, employs 11,700 people in 20 countries, spread over 650 operating locations -- including outposts in India and China. The Americas materials division, meanwhile, has 17,800 employees in 44 states, spread over 1,200 locations.

The products division -- concrete and clay construction materials -- is just as hefty. In Europe, it amounts to a further 18,000 people in 19 countries; in America and Canada some 3,200 employees across 180 locations. Thirdly, there's the distribution division: 13,000 people in hundreds of builders' and plumbers' merchants, and similar outlets.

In short, although you may not have heard of it, CRH has a decent footprint. And one that's rapidly expanding -- in 2011, for instance, the business spent €610m on 45 separate acquisitions. For 2010, the figure was €536m, and in 2009, €450m.

The numbers

So with that introduction out of the way, let's take a look at the 2011 financials.

  • Sales up 5% to €18.1bn.
  • Pre-tax profit up 33% to €711m.
  • EPS up 35% to 82.6c.
  • Dividend per share unchanged at 62.5c.
Year‑end net debt was €3.5 billion; impairment charges stood at just €32 million; and -- in its own words -- "the company's balance sheet is one of the strongest in the sector," a claim that the low debt level endorses.

Is it a buy?

On a prospective price-to-earnings ratio of 12.6 and a forecast yield of 4%, this isn't a business that is cheap for a mature cash cow.

But that's the point: CRH isn't a mature cash cow, but an acquisitive and growing FTSE 100-listed business with cow-like characteristics that happens to have been previously listed in a market that's down 70% -- a situation little changed today from when my Foolish colleague Padraig O'Hannelly wrote those words in 2010.

At which point, incidentally, he noted that Ken Fisher had recently identified CRH "as a stock to buy". And at this point, I'm minded to point out that it's the sort of business that might appeal to Warren Buffett, too.

Personally, I'm not a holder. But CRH is definitely on the watch list, and has been for some time.

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