NYSE:VMC

Stock Analysis Report

Executive Summary

Vulcan Materials Company produces and supplies construction materials primarily in the United States.


Snowflake Analysis

Acceptable track record with mediocre balance sheet.


Similar Companies

Share Price & News

How has Vulcan Materials's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VMC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-5.1%

VMC

-3.6%

US Basic Materials

-4.2%

US Market


1 Year Return

15.0%

VMC

18.9%

US Basic Materials

14.0%

US Market

Return vs Industry: VMC underperformed the US Basic Materials industry which returned 22.2% over the past year.

Return vs Market: VMC exceeded the US Market which returned 17.8% over the past year.


Shareholder returns

VMCIndustryMarket
7 Day-5.1%-3.6%-4.2%
30 Day-7.3%-5.6%-1.8%
90 Day-9.4%-7.7%2.6%
1 Year16.1%15.0%20.0%18.9%16.3%14.0%
3 Year11.0%8.0%7.3%4.7%43.2%34.0%
5 Year59.9%53.6%59.8%53.2%65.9%47.6%

Price Volatility Vs. Market

How volatile is Vulcan Materials's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Vulcan Materials undervalued compared to its fair value and its price relative to the market?

28.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VMC ($133.95) is trading below our estimate of fair value ($180.35)

Significantly Below Fair Value: VMC is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: VMC is poor value based on its PE Ratio (28.5x) compared to the Basic Materials industry average (25.7x).

PE vs Market: VMC is poor value based on its PE Ratio (28.5x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: VMC is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: VMC is overvalued based on its PB Ratio (3.2x) compared to the US Basic Materials industry average (2.1x).


Next Steps

Future Growth

How is Vulcan Materials forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

14.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VMC's forecast earnings growth (14.1% per year) is above the savings rate (1.7%).

Earnings vs Market: VMC's earnings (14.1% per year) are forecast to grow slower than the US market (14.1% per year).

High Growth Earnings: VMC's earnings are forecast to grow, but not significantly.

Revenue vs Market: VMC's revenue (6.1% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: VMC's revenue (6.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VMC's Return on Equity is forecast to be low in 3 years time (13.1%).


Next Steps

Past Performance

How has Vulcan Materials performed over the past 5 years?

24.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VMC has high quality earnings.

Growing Profit Margin: VMC's current net profit margins (12.6%) are higher than last year (11.8%).


Past Earnings Growth Analysis

Earnings Trend: VMC's earnings have grown significantly by 24.6% per year over the past 5 years.

Accelerating Growth: VMC's earnings growth over the past year (20.2%) is below its 5-year average (24.6% per year).

Earnings vs Industry: VMC earnings growth over the past year (20.2%) underperformed the Basic Materials industry 30.2%.


Return on Equity

High ROE: VMC's Return on Equity (11.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Vulcan Materials's financial position?


Financial Position Analysis

Short Term Liabilities: VMC's short term assets ($1.4B) exceed its short term liabilities ($535.6M).

Long Term Liabilities: VMC's short term assets ($1.4B) do not cover its long term liabilities ($4.5B).


Debt to Equity History and Analysis

Debt Level: VMC's debt to equity ratio (49%) is considered high.

Reducing Debt: VMC's debt to equity ratio has increased from 47.6% to 49% over the past 5 years.

Debt Coverage: VMC's debt is well covered by operating cash flow (35.7%).

Interest Coverage: VMC's interest payments on its debt are well covered by EBIT (6.7x coverage).


Balance Sheet

Inventory Level: VMC has a high level of physical assets or inventory.

Debt Coverage by Assets: VMC's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is Vulcan Materials's current dividend yield, its reliability and sustainability?

1.04%

Current Dividend Yield


Dividend Yield vs Market

company1.0%marketbottom25%1.5%markettop25%3.8%industryaverage1.0%forecastin3Years1.1%

Current dividend yield vs market & industry

Notable Dividend: VMC's dividend (1.02%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: VMC's dividend (1.02%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: VMC's dividend payments have been volatile in the past 10 years.

Growing Dividend: VMC's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (26.4%), VMC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: VMC's dividends in 3 years are forecast to be well covered by earnings (19.6% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.1yrs

Average management tenure


CEO

Tom Hill (60yo)

5.6yrs

Tenure

US$7,681,409

Compensation

Mr. James Thomas Hill, also known as Tom, has been the Chief Executive Officer and President at Vulcan Materials Company since July 14, 2014. Mr. Hill served as the Chief Operating Officer and Executive Vi ...


CEO Compensation Analysis

Compensation vs Market: Tom's total compensation ($USD7.68M) is about average for companies of similar size in the US market ($USD10.81M).

Compensation vs Earnings: Tom's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
James Hill
Chairman5.6yrsUS$7.68m0.097% $16.7m
Suzanne Wood
Senior VP & CFO1.4yrsUS$1.44mno data
Thompson Baker
Chief Operating Officer0.8yrsUS$2.46m0.015% $2.6m
Stanley Bass
Chief Growth Officer8.1yrsUS$2.66m0.033% $5.7m
Mark Warren
Vice President of Investor Relations0yrsno datano data
Mitesh Shah
VP & Deputy General Counsel0.3yrsno datano data
Denson Franklin
Senior VP0.2yrsno data0.000090% $15.5k
Janet Kavinoky
Vice President of External Affairs & Corporate Communications0yrsno datano data
Larry Miller
Vice President of Human Resources2.1yrsno datano data
Jerry Perkins
President of Southern & Gulf Coast Division0.8yrsno data0.011% $1.9m

1.1yrs

Average Tenure

58yo

Average Age

Experienced Management: VMC's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
James Hill
Chairman5.6yrsUS$7.68m0.097% $16.7m
O. B. Hall
Lead Director0.8yrsUS$283.41kno data
Kathleen Quirk
Independent Director2.3yrsUS$261.29kno data
Lee Styslinger
Independent Director6.9yrsUS$270.31k0.0030% $520.5k
David Steiner
Independent Director3yrsUS$262.60kno data
Richard O'Brien
Independent Director11.3yrsUS$300.03kno data
James Prokopanko
Independent Director10.2yrsUS$317.66kno data
Thomas Fanning
Independent Director5yrsUS$266.05kno data
D. Wilson
Independent Director0.6yrsno datano data
Cynthia Hostetler
Independent Director5.6yrsUS$276.05kno data

4.5yrs

Average Tenure

59.5yo

Average Age

Experienced Board: VMC's board of directors are considered experienced (4.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Vulcan Materials Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Vulcan Materials Company
  • Ticker: VMC
  • Exchange: NYSE
  • Founded: 1909
  • Industry: Construction Materials
  • Sector: Materials
  • Market Cap: US$17.235b
  • Shares outstanding: 132.35m
  • Website: https://www.vulcanmaterials.com

Number of Employees


Location

  • Vulcan Materials Company
  • 1200 Urban Center Drive
  • Birmingham
  • Alabama
  • 35242
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VMCNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
VMCDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0LRKLSE (London Stock Exchange)YesCommon StockGBUSDJan 1968
V1MC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 4 REPR 1 COMBRBRLJan 2020

Biography

Vulcan Materials Company produces and supplies construction materials primarily in the United States. The company operates through four segments: Aggregates, Asphalt, Concrete, and Calcium. The Aggregates segment provides crushed stones, sand and gravel, sand, and other aggregates; and related products and services that are applied in construction and maintenance of highways, streets, and other public works, as well as in the construction of housing and commercial, industrial, and other nonresidential facilities. The Asphalt Mix segment offers asphalt mix in Alabama, Arizona, California, New Mexico, Tennessee, and Texas. The Concrete segment provides ready-mixed concrete in California, Maryland, New Mexico, Texas, Virginia, Washington D.C., and the Bahamas. The Calcium segment mines, produces, and sells calcium products for the animal feed, plastics, and water treatment industries. The company was formerly known as Virginia Holdco, Inc. Vulcan Materials Company was founded in 1909 and is headquartered in Birmingham, Alabama. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 00:40
End of Day Share Price2020/02/24 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.