Vulcan Materials Company (VMC)
- 38.25 (USD)
(0.0 %)
9/8/2010 4:00:00 PM
VMC Stock Report
NYSE:
VMC
38.25
(USD)
(0.0 %
)
09/08 4:00 PM
Open
38.26
Day's Range
37.76
-
38.47
52Wk Range
36.42 - 62.00
Mkt Cap
4.9 Billion
Vol/Avg
1662655/2.5 Million
Div/Yield
2.60%
Key Fundamentals
| Price (9/8/2010) | 38.25 |
|---|---|
| Volume (9/8/2010) | 1662655 |
| Last Close Price | 38.25 |
| 10 Day Average Volume | 2.5 Million |
| 13 Week Price Range | 36.42 - 50.25 |
| 52 Week Price Range | 36.42 - 62.00 |
| LTM Revenue | 2.6 Billion |
| Shares Outstanding (12/31/2009) | 128.3 Million |
| Market Capitalization | 4.9 Billion |
| Shares Held By Institutions | 6.9 Million |
| Institutional Holders | 510 |
| % Shares Held By Institutions | 90.91% |
| Earnings Per Share (EPS) | 0.25 |
| P/E Ratio | |
| Book Value Per Share | 31.5282 |
| Gross Margin | 13.31% |
| Annual Dividend | 1 |
| Dividend Yield | 2.60% |
| Beta | 1.363581 |
| Fiscal Year Ends | December |
About Vulcan Materials Company
Vulcan Materials Companyis considered to operate in the Industrial Materials sector. They specifically operate in the General Building Materials business segment contained within the Building Materials industry.
Vulcan Materials Company is a New Jersey corporation that was incorporated on February 14, 2007. It provides the basic materials for the infrastructure needed to drive the U.S. economy. The Company is a producer of construction aggregates mainly crushed stone, sand and gravel a major producer of asphalt mix and concrete and producer of cement in Florida. It has three reporting segments organized around it major product lines: Aggregates, Asphalt mix and Concrete, and Cement. The Company has combined its Asphalt mix and Concrete operations into one reporting segment as the products are similar in nature and the businesses exhibit similar economic characteristics, product processes, types and classes of customer, methods of distribution and regulatory environments. Construction aggregates include crushed stone, sand and gravel, rock asphalt and recycled concrete. Aggregates are essential infrastructure materials required by the U. S. economy, and are employed in virtually all types of construction, including highway construction and maintenance, and in the production of asphalt mix and ready-mixed concrete. Aggregates also are used as railroad track ballast. The Aggregates segment produces and sells aggregates and related products and services in eight regional divisions. The Asphalt mix and Concrete segment produces and sells asphalt mix and ready-mixed concrete in four regional divisions serving 8 states mainly in its mid-Atlantic, Florida, southwestern and western markets, the Bahamas and the District of Columbia. Additionally, two of the divisions produce and sell other concrete products such as block, prestressed and precast beams, and resell purchased building materials related to the use of ready-mixed concrete and concrete block. The Company's Newberry, Florida cement plant produces Portland and masonry cement which is sold in both bulk form and bags to the concrete products industry. The Brooksville, Florida plant produces calcium products for the animal feed, paint, plastics and joint compound industries. The Company's products are sold mainly to private industry and not directly to governmental entities. The products of all of its reporting segments are marketed under highly competitive conditions, including competition in price, service and product performance. The Company's operations are subject to federal, state and local laws and regulations relating to the environment and to health and safety, including noise, water discharge, air quality, dust control, zoning and permitting.
Ockham's Rating/Recommendation Summary
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VMC Revenue
For a long time, value investors have used the current share price relative to sales per share levels as an important valuation tool. We utilize a historical weighted average methodology that treats recent years more importantly in the calculation. When looking at VMC through this framework, we can see that our weighted average historical high and low Price to Sales per share ratios over the last 10 years are 2.95x and 1.68x respectively.
Utilizing this range we can see that VMC’s current Price to Sales per share ratio of 1.89x is significantly below its average levels historically. In fact, with a current price of 38.31, VMC is a full 19% below its average Price to Sales ratio at comparable sales levels. This is a rare occurrence and, when taken in context of the other areas of our analysis, can be a strong positive for our outlook for VMC.
VMC Cash Earnings
Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. VMC is significantly above its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for VMC to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 52.73 and a 34.44 low over the same period.
So what does this tell us about VMC in particular? Basically, we would value the current level of Cash Earnings per share (which is at 760.91) as significantly overvalued. Just by looking at the last closing price of VMC, which was 38.31, we can see that compared to the historical high Price to Cash Earnings levels we calculated, the market has already rewarded VMC with a higher stock price. So basically, we don't view this level of Cash Earnings or stock price as compatible with a long term value at this point. Just remember, that does not mean that VMC may not have other merits with which to find a good investment opportunity, it just means that we would prefer to see either an increase in Cash Earnings or a decrease in stock price before we would become bullish on this metric.
VMC Dividends
When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for VMC to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.
The estimated annual dividend for VMC is 1.24 producing a current dividend yield of 3.24%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from VMC against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from VMC over previous years was 4.96% while the lowest dividend yield was 1.43%. Therefore, the current dividend yield of VMC is above the historical median by 1.31%. This is definitely a positive in our view.