July 24, 2025 a 11:31 am
VMC: Dividend Analysis - Vulcan Materials Company
Vulcan Materials Company, a prominent player in the construction materials industry, has demonstrated a robust commitment to dividend payments with an impressive track record spanning over 41 years. Despite the pressures of an evolving market landscape, VMC has maintained consistent dividend growth, underscoring the company's stability and its management's strategic vision. With a modest dividend yield of 0.72%, Vulcan offers a well-rounded investment profile characterized by reliability and incremental growth.
📊 Overview
Vulcan Materials Company operates within the Materials sector, offering a range of construction aggregates, asphalt, and concrete products. With a current dividend yield of 0.72% and a dividend per share of $1.85, the company boasts an award-winning 41-year history of dividend payments, with no recent cuts or suspensions, reflecting strong fiscal discipline.
| Detail | Value |
|---|---|
| Sector | Materials |
| Dividend yield | 0.72% |
| Current dividend per share | $1.85 USD |
| Dividend history | 41 years |
| Last cut or suspension | None |
🗣️ Dividend History
The dividend history of Vulcan Materials showcases the resilience and strategic foresight in maintaining shareholder value through uninterrupted dividends for 41 years. This track record is vital for investors seeking reliable income streams from their equity investments.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | $1.47 |
| 2024 | $1.84 |
| 2023 | $1.72 |
| 2022 | $1.60 |
| 2021 | $1.48 |
📈 Dividend Growth
Examining the dividend growth rate over 3 and 5 years provides insights into Vulcan's ability to increase shareholder returns. A stable growth rate often reflects solid earnings growth and prudent capital management.
| Time Frame | Growth |
|---|---|
| 3 years | 7.53% |
| 5 years | 8.21% |
The average dividend growth is 8.21% over 5 years. This shows moderate but steady dividend growth.
⚖️ Payout Ratio
Understanding Vulcan's payout ratios is crucial as they indicate how much profit is returned to shareholders as dividends. Traditionally, a payout ratio under 50% is desirable to ensure sustainability and potential for future growth.
| Key figure | Ratio |
|---|---|
| EPS-based | 26.07% |
| Free cash flow-based | 28.08% |
With EPS and FCF-based payout ratios at 26.07% and 28.08%, respectively, Vulcan demonstrates a well-balanced approach to dividend distribution, ensuring both investor returns and reinvestment potential.
💡 Cashflow & Capital Efficiency
Cash flow metrics and capital efficiency ratios offer crucial insights into a company's financial health. These key figures help assess Vulcan's ability to generate and efficiently use cash flow to fuel growth and maintain operations.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 2.37% | 2.20% | 2.30% |
| Earnings Yield | 2.68% | 3.09% | 2.47% |
| CAPEX to Operating Cash Flow | 42.81% | 56.78% | 53.35% |
| Stock-based Compensation to Revenue | 0.72% | 0.81% | 0.56% |
| Free Cash Flow / Operating Cash Flow Ratio | 57.19% | 43.22% | 46.65% |
Vulcan's consistent free cash flow generation and careful capital allocation reflect its stable cash flow management and operational efficiency.
🔍 Balance Sheet & Leverage Analysis
Examining leverage ratios and balance sheet health provides insights into Vulcan's financial stability and risk profile. High leverage can imply higher risk, while a strong balance sheet signals financial robustness.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.72 | 0.59 | 0.65 |
| Debt-to-Assets | 34.08% | 30.15% | 31.78% |
| Debt-to-Capital | 41.79% | 36.95% | 39.50% |
| Net Debt to EBITDA | 2.66 | 1.68 | 2.85 |
| Current Ratio | 1.83 | 3.17 | 1.99 |
| Quick Ratio | 1.28 | 2.39 | 1.38 |
| Financial Leverage | 2.11 | 1.94 | 2.05 |
Vulcan's moderate leverage given the steady cash flow position marks a financial strategy aligned with maintaining liquidity and leveraging growth opportunities efficiently.
🏛️ Fundamental Strength & Profitability
Profitability ratios such as ROE, ROA, and various margin analysis are critical in assessing how effectively Vulcan is converting sales into profits and delivering returns on investments.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 11.23% | 12.47% | 8.31% |
| Return on Assets | 5.33% | 6.42% | 4.04% |
| Margins: Net | 12.29% | 11.99% | 7.87% |
| Margins: EBIT | 18.38% | 18.49% | 13.09% |
| Margins: EBITDA | 26.70% | 26.42% | 20.92% |
| Margins: Gross | 26.96% | 25.04% | 21.29% |
| R&D to Revenue | 0% | 0% | 0% |
Overall, Vulcan's profitability metrics, especially its stable margins and returns on equity and assets, reflect a financially healthy company with a focus on value creation.
📉 Price Development
✅ Dividend Scoring System
| Criteria | Score | Score Bar |
|---|---|---|
| Dividend Yield | 3 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 4 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 5 |
Total Score: 34/40
📈 Rating
In conclusion, Vulcan Materials Company presents a compelling investment case for dividend-focused investors, thanks to its solid dividend history and moderate growth. The company's strong financial metrics and effective cash management underscore its ability to maintain and increase dividend payouts, making it an attractive addition to a diversified portfolio.