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Vulcan Materials Company (VMC)
NYSE:VMC
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Vulcan Materials
(NYSE:VMC)72Outperform
Positive Factors
Acquisitions and Expansion
VMC announced it's acquiring Wake Stone, a pure play aggregates producer in the Carolinas, which could give VMC a leading position in North Carolina and bolster its strong position in South Carolina.
Earnings and Financial Performance
Vulcan Materials Company posted a solid fourth quarter with EBITDA increasing 16% year-over-year, supported by strong pricing and improved operational efficiency.
Negative Factors
Market Expectations
The full year adjusted EBITDA outlook was revised lower to $2.00B, which is below market expectations.
Vulcan Materials (VMC) vs. S&P 500 (SPY)
Market Cap
$31.75B
Dividend Yield0.77%
Average Volume (3M)884.38K
Price to Earnings (P/E)35.1
Beta (1Y)1.10
Revenue Growth-4.68%
EPS Growth-1.73%
CountryUS
Employees10,961
SectorBasic Materials
Sector Strength56
IndustryConstruction Materials
Share Statistics
EPS (TTM)6.86
Shares Outstanding132,109,660
10 Day Avg. Volume1,089,077
30 Day Avg. Volume884,377
Financial Highlights & Ratios
PEG Ratio14.12
Price to Book (P/B)N/A
Price to Sales (P/S)4.28
Price to Cash Flow (P/CF)18.00
P/FCF Ratio25.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$300.22Price Target Upside27.66% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
Vulcan Materials Business Overview & Revenue Model
Company DescriptionVulcan Materials Company (VMC) is a leading producer of construction aggregates in the United States, primarily dealing with crushed stone, sand, and gravel. The company operates in the construction materials sector, providing essential raw materials for infrastructure and building projects. Additionally, Vulcan Materials supplies asphalt mix and ready-mixed concrete, catering to both public and private sector needs across various regions.
How the Company Makes MoneyVulcan Materials Company generates revenue primarily through the sale of construction aggregates, which are used in a wide range of infrastructure projects including roads, bridges, and commercial buildings. The company's key revenue streams include the production and distribution of crushed stone, sand, and gravel, which are sold to construction companies, government agencies, and other entities involved in building and infrastructure development. Vulcan Materials also earns from its asphalt mix and ready-mixed concrete segments, which provide further diversification and stability to its income. The company's strategic location of quarries and production facilities near high-growth markets and urban centers enhances its ability to efficiently supply materials, thus contributing to its profitability. Additionally, Vulcan's partnerships and contracts with state and local governments for infrastructure projects play a significant role in sustaining its revenue growth.
Vulcan Materials Financial Statement Overview
Summary
Vulcan Materials demonstrates strong financial health with substantial revenue growth, effective cost management, and solid cash flow generation. Despite a rise in leverage, the company maintains a strong equity position and profitability, suggesting a well-balanced financial strategy. Future stability will depend on managing debt levels while sustaining growth.Income Statement
Vulcan Materials has shown strong revenue growth over the years, with a notable increase of 12.5% in 2021 and a consistent rise in gross profit margin, reaching 26.9% in 2024. However, the net profit margin has slightly declined from 12.0% to 12.3% over the same period. The EBIT and EBITDA margins are stable, indicating good operational efficiency, although the decline in net income in 2024 might be a concern.82
Very Positive
Balance Sheet
The company's debt-to-equity ratio has increased, reflecting higher leverage in 2024. However, Vulcan Materials maintains a healthy equity ratio of 47.5%, showcasing a stable financial structure. The return on equity improved impressively to 11.2%, indicating effective utilization of equity despite increased debt levels.75
Positive
Cash Flow
Vulcan Materials' cash flow performance is solid, with a commendable free cash flow growth and an operating cash flow to net income ratio of 1.5 in 2024, signifying efficient cash generation. Despite increased capital expenditures, the company's free cash flow remains robust, although fluctuations in investing cash flows indicate potential risk.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.42B | 7.78B | 7.32B | 5.55B | 4.86B | Gross Profit |
| 2.00B | 1.95B | 1.56B | 1.37B | 1.28B | EBIT |
| 1.36B | 1.43B | 951.40M | 1.01B | 895.73M | EBITDA |
| 1.36B | 2.06B | 1.53B | 1.53B | 1.31B | Net Income Common Stockholders |
| 911.90M | 933.20M | 575.60M | 670.80M | 584.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 559.70M | 931.10M | 161.40M | 235.00M | 1.20B | Total Assets |
| 17.10B | 14.55B | 14.23B | 13.68B | 11.69B | Total Debt |
| 5.83B | 4.39B | 4.52B | 4.52B | 3.69B | Net Debt |
| 5.27B | 3.45B | 4.36B | 4.29B | 2.49B | Total Liabilities |
| 8.96B | 7.04B | 7.28B | 7.11B | 5.66B | Stockholders Equity |
| 8.12B | 7.48B | 6.93B | 6.54B | 6.03B |
| Cash Flow | Free Cash Flow | |||
| 806.10M | 664.20M | 535.60M | 560.60M | 708.16M | Operating Cash Flow |
| 1.41B | 1.54B | 1.15B | 1.01B | 1.07B | Investing Cash Flow |
| -2.81B | -163.50M | -1.05B | -1.87B | -381.51M | Financing Cash Flow |
| 1.06B | -585.60M | -175.20M | -94.30M | 234.66M |
Vulcan Materials Technical Analysis
Negative
235.17
Price Trends
262.23
Negative
267.91
Negative
258.07
Negative
Market Momentum
-8.42
Positive
29.39
Positive
27.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VMC, the sentiment is Negative. The current price of 235.17 is below the 20-day moving average (MA) of 256.69, below the 50-day MA of 262.23, and below the 200-day MA of 258.07, indicating a bearish trend. The MACD of -8.42 indicates Positive momentum. The RSI at 29.39 is Positive, neither overbought nor oversold. The STOCH value of 27.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VMC.
Vulcan Materials Risk Analysis
Vulcan Materials disclosed 23 risk factors in its most recent earnings report. Vulcan Materials reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Vulcan Materials Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $69.50B | 20.49 | 16.07% | 1.73% | 1.78% | 15.53% | |
72 Outperform | $31.75B | 35.08 | 11.79% | 0.77% | -4.68% | -1.73% | |
66 Neutral | $7.16B | 15.37 | 33.51% | 0.47% | 0.64% | -1.15% | |
63 Neutral | $29.12B | 14.75 | 22.83% | 0.64% | -3.56% | 70.93% | |
59 Neutral | $9.47B | 10.11 | 8.39% | 0.99% | -0.45% | -1.48% | |
47 Neutral | $2.64B | -4.00 | -31.55% | 3.33% | 2.93% | -29.90% |
* Basic Materials Sector Average
Performance Comparison
VMC
Vulcan Materials
235.17
-30.10
-11.35%
CX
Cemex SAB
6.36
-1.47
-18.77%
EXP
Eagle Materials
220.79
-35.19
-13.75%
MLM
Martin Marietta Materials
475.91
-117.53
-19.80%
CRH
CRH plc
98.78
18.90
23.66%
Vulcan Materials Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -13.05% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance in terms of adjusted EBITDA growth, strategic acquisitions, and pricing improvements. However, there were notable challenges in shipment volumes and private non-residential demand. Overall, the sentiment leans positive due to significant achievements and a robust outlook for 2025.Highlights
Record Adjusted EBITDA Growth
Vulcan Materials achieved $550 million in adjusted EBITDA for Q4 2024, marking a 16% year-over-year improvement with a consistent improvement in adjusted EBITDA margin for eight consecutive quarters.
Significant Acquisitions and Expansion
The company deployed over $2 billion towards strategic acquisitions, expanding presence in new growth areas and strengthening existing franchises in top revenue states.
Strong Pricing Momentum in Aggregates
Aggregate freight-adjusted price improved by 11% in the quarter, consistent with full-year results, showcasing widespread geographical price improvement.
Cash Gross Profit per Ton Growth
Cash gross profit per ton in the Aggregates segment expanded by 16% to $11.50, driven by pricing momentum and moderating unit cash cost of sales.
Successful Financial Management
The company maintained a net debt to adjusted EBITDA leverage of 2.3 times and returned $313 million to shareholders through dividends and share repurchases.
Lowlights
Decline in Aggregate Shipments
Aggregate shipments decreased by 3% compared to the prior year due to mixed performance across geographies and end uses with headwinds in private construction activity.
Challenges in Private Non-Residential Demand
Expectations for lower private non-residential demand in 2025, with potential bottoming by mid-year and gradual recovery by the second half.
Headwinds in Residential Construction
Affordability and elevated interest rates remain challenges, although there is some expectation for modest growth in single-family housing in 2025.
Company Guidance
During Vulcan Materials Company's Fourth Quarter 2024 earnings call, the company provided guidance for 2025, emphasizing a strategic focus on growth and operational efficiency. They reported a strong finish to 2024, with a 16% year-over-year increase in adjusted EBITDA for the fourth quarter, reaching $550 million. Vulcan anticipates adjusted EBITDA for 2025 to be between $2.35 and $2.55 billion. The company projects aggregate shipments to grow by 3% to 5%, driven by recent acquisitions and stable demand. Pricing is expected to rise by 5% to 7%, with freight-adjusted aggregates unit cash costs increasing by low to mid-single digits. Additionally, Vulcan plans to reinvest $750 to $800 million in capital expenditures and expects a return on invested capital consistent with the prior year's 16.2%. Inflationary pressures are moderating, and Vulcan is adopting process intelligence to enhance operational efficiencies, aiming for another year of double-digit expansion in aggregate unit profitability.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.