Vulcan (VMC) Rewards Investors With a 7.5% Dividend Increase
Vulcan Materials Company VMC recently announced an increase in the dividend payout, emphasizing its sustainable growth and ability to deliver long-term shareholder value.
The board of directors approved a 7.5% hike in its quarterly cash dividend to 43 cents per share ($1.72 annually) from 40 cents ($1.60 annually). The new dividend will be paid out on Mar 20, 2023 to its shareholders of record as of Mar 6, 2023. The dividend yield, based on VMC’s Feb 10 closing price, is approximately 0.93%.
The share price of VMC dropped 0.5% during the trading session on Feb 10 and 0.01% in the after-hours trading session.
Consistent Dividend
Vulcan has been making consistent increases in its quarterly dividend payout over the past years, reflecting robust cash generation and financial strength. Its financial strength aids the company in taking such decisions. At the end of third-quarter 2022, VMC’s net leverage was 2.5x adjusted EBITDA and within the company’s stated target range of 2x to 2.5x, thanks to disciplined capital management. Through the first nine months of 2022, the company deployed $378 million in operating and growth capital to support and expand the valuable franchise, $528 million in M&A to grow and strengthen market positions and $159 million in dividends to return cash to shareholders.
The nation’s largest producer of construction aggregates has been witnessing consistent growth in aggregates unit profitability, solid contributions from acquisitions and a positive pricing environment, despite ongoing volatility in the macro environment and a slowdown in single-family residential demand. Although higher diesel fuel costs and inflationary pressures for many other parts and supplies are causes of concerns, growing public construction activity, particularly highways, and the recovery in private nonresidential contract awards should help drive growth.
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Shares of Vulcan Materials have risen 3.5% over the past six months, outperforming the Zacks Building Products - Concrete and Aggregates industry’s growth of 1.9%.
Zacks Rank & Key Picks
VMC currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Construction sector are United Rentals, Inc. URI, Skyline Champion Corporation SKY and Sterling Infrastructure, Inc. STRL.
United Rentals currently sports a Zacks Rank #1. Shares of the company have gained 43.2% in the past year. The long-term earnings growth rate of the company is 16.3%.
The Zacks Consensus Estimate for URI’s 2023 sales and EPS suggests growth of 20.3% and 28.3%, respectively, from the year-ago period’s reported levels.
Skyline currently flaunts a Zacks Rank #1. SKY has a trailing four-quarter earnings surprise of 43.2%, on average. Its shares have rallied 30.5% in the past three months.
The Zacks Consensus Estimate for SKY’s fiscal 2023 sales and EPS suggests growth of 19% and 55.7%, respectively, from the 2023 period’s expected levels.
Sterling currently carries a Zacks Rank #2. STRL has a trailing four-quarter earnings surprise of 20%, on average. Shares of the company have gained 24% in the past year.
The Zacks Consensus Estimate for STRL’s fiscal 2023 sales and EPS suggests growth of 0.6% and 9.9%, respectively.
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Vulcan Materials Company (VMC) : Free Stock Analysis Report
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Skyline Corporation (SKY) : Free Stock Analysis Report
