VULCAN MATERIALS CO (VMC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:VMC - US9291601097 - Common Stock
300.4 USD
+0.33 (+0.11%)
300.4 USD
0 (0%)
VMC gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 13 industry peers in the Construction Materials industry. VMC scores excellent on profitability, but there are some minor concerns on its financial health. VMC is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
- In the past year VMC was profitable.
- VMC had a positive operating cash flow in the past year.
- Each year in the past 5 years VMC has been profitable.
- In the past 5 years VMC always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 6.59%, VMC is in the better half of the industry, outperforming 69.23% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 12.80%, VMC is in the better half of the industry, outperforming 61.54% of the companies in the same industry.
- With a decent Return On Invested Capital value of 7.67%, VMC is doing good in the industry, outperforming 61.54% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for VMC is below the industry average of 9.37%.
- The last Return On Invested Capital (7.67%) for VMC is above the 3 year average (6.80%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.59% | ||
| ROE | 12.8% | ||
| ROIC | 7.67% |
ROA(3y)5.26%
ROA(5y)5.14%
ROE(3y)10.67%
ROE(5y)10.39%
ROIC(3y)6.8%
ROIC(5y)6.44%
1.3 Margins
- Looking at the Profit Margin, with a value of 14.19%, VMC is in the better half of the industry, outperforming 76.92% of the companies in the same industry.
- VMC's Profit Margin has been stable in the last couple of years.
- VMC has a Operating Margin of 20.10%. This is in the better half of the industry: VMC outperforms 76.92% of its industry peers.
- In the last couple of years the Operating Margin of VMC has grown nicely.
- VMC has a Gross Margin (28.23%) which is comparable to the rest of the industry.
- In the last couple of years the Gross Margin of VMC has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.1% | ||
| PM (TTM) | 14.19% | ||
| GM | 28.23% |
OM growth 3Y5.54%
OM growth 5Y1.72%
PM growth 3Y0.58%
PM growth 5Y-0.38%
GM growth 3Y2.91%
GM growth 5Y1.13%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), VMC is destroying value.
- The number of shares outstanding for VMC remains at a similar level compared to 1 year ago.
- VMC has about the same amout of shares outstanding than it did 5 years ago.
- VMC has a worse debt/assets ratio than last year.
2.2 Solvency
- VMC has an Altman-Z score of 4.23. This indicates that VMC is financially healthy and has little risk of bankruptcy at the moment.
- VMC's Altman-Z score of 4.23 is fine compared to the rest of the industry. VMC outperforms 76.92% of its industry peers.
- VMC has a debt to FCF ratio of 4.15. This is a neutral value as VMC would need 4.15 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 4.15, VMC is in the better half of the industry, outperforming 76.92% of the companies in the same industry.
- A Debt/Equity ratio of 0.50 indicates that VMC is not too dependend on debt financing.
- With a Debt to Equity ratio value of 0.50, VMC perfoms like the industry average, outperforming 46.15% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | 4.15 | ||
| Altman-Z | 4.23 |
ROIC/WACC0.73
WACC10.57%
2.3 Liquidity
- A Current Ratio of 2.23 indicates that VMC has no problem at all paying its short term obligations.
- VMC has a Current ratio (2.23) which is comparable to the rest of the industry.
- A Quick Ratio of 1.56 indicates that VMC should not have too much problems paying its short term obligations.
- Looking at the Quick ratio, with a value of 1.56, VMC is in the better half of the industry, outperforming 69.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.23 | ||
| Quick Ratio | 1.56 |
3. Growth
3.1 Past
- VMC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.87%, which is quite impressive.
- VMC shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.91% yearly.
- The Revenue has been growing slightly by 6.54% in the past year.
- VMC shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.52% yearly.
EPS 1Y (TTM)23.87%
EPS 3Y14.29%
EPS 5Y9.91%
EPS Q2Q%27.93%
Revenue 1Y (TTM)6.54%
Revenue growth 3Y10.14%
Revenue growth 5Y8.52%
Sales Q2Q%14.35%
3.2 Future
- Based on estimates for the next years, VMC will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.84% on average per year.
- VMC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.87% yearly.
EPS Next Y12.7%
EPS Next 2Y14.74%
EPS Next 3Y15.19%
EPS Next 5Y11.84%
Revenue Next Year7.96%
Revenue Next 2Y6.39%
Revenue Next 3Y6.44%
Revenue Next 5Y7.87%
3.3 Evolution
- The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
- VMC is valuated quite expensively with a Price/Earnings ratio of 35.51.
- Based on the Price/Earnings ratio, VMC is valued a bit more expensive than the industry average as 76.92% of the companies are valued more cheaply.
- When comparing the Price/Earnings ratio of VMC to the average of the S&P500 Index (27.25), we can say VMC is valued slightly more expensively.
- With a Price/Forward Earnings ratio of 30.26, VMC can be considered very expensive at the moment.
- 69.23% of the companies in the same industry are cheaper than VMC, based on the Price/Forward Earnings ratio.
- VMC is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.51 | ||
| Fwd PE | 30.26 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of VMC indicates a slightly more expensive valuation: VMC is more expensive than 69.23% of the companies listed in the same industry.
- VMC's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.63 | ||
| EV/EBITDA | 18.98 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates VMC does not grow enough to justify the current Price/Earnings ratio.
- The decent profitability rating of VMC may justify a higher PE ratio.
- VMC's earnings are expected to grow with 15.19% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.8
PEG (5Y)3.58
EPS Next 2Y14.74%
EPS Next 3Y15.19%
5. Dividend
5.1 Amount
- VMC has a yearly dividend return of 0.65%, which is pretty low.
- VMC's Dividend Yield is a higher than the industry average which is at 2.03.
- Compared to an average S&P500 Dividend Yield of 1.82, VMC's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.65% |
5.2 History
- On average, the dividend of VMC grows each year by 8.29%, which is quite nice.
- VMC has paid a dividend for at least 10 years, which is a reliable track record.
- VMC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.29%
Div Incr Years11
Div Non Decr Years12
5.3 Sustainability
- VMC pays out 22.91% of its income as dividend. This is a sustainable payout ratio.
- VMC's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP22.91%
EPS Next 2Y14.74%
EPS Next 3Y15.19%
VULCAN MATERIALS CO / VMC FAQ
What is the fundamental rating for VMC stock?
ChartMill assigns a fundamental rating of 6 / 10 to VMC.
What is the valuation status for VMC stock?
ChartMill assigns a valuation rating of 2 / 10 to VULCAN MATERIALS CO (VMC). This can be considered as Overvalued.
How profitable is VULCAN MATERIALS CO (VMC) stock?
VULCAN MATERIALS CO (VMC) has a profitability rating of 7 / 10.
How financially healthy is VULCAN MATERIALS CO?
The financial health rating of VULCAN MATERIALS CO (VMC) is 6 / 10.
What is the expected EPS growth for VULCAN MATERIALS CO (VMC) stock?
The Earnings per Share (EPS) of VULCAN MATERIALS CO (VMC) is expected to grow by 12.7% in the next year.