Vulcan Materials Co (VMC, Financial) has recently been in the spotlight, drawing interest from investors and financial analysts due to its robust financial stance. With shares currently priced at $208.33, Vulcan Materials Co has witnessed a daily loss of 0.74%, marked against a three-month change of 0.9%. A thorough analysis, underlined by the GuruFocus Score Rating, suggests that Vulcan Materials Co is well-positioned for substantial growth in the near future.
Understanding the GF Score
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 9/10
- Growth rank: 10/10
- GF Value rank: 6/10
- Momentum rank: 6/10
Each one of these components is ranked and the ranks also have positive correlation with the long term performances of stocks. The GF score is calculated using the five key aspects of analysis. Through backtesting, we know that each of these key aspects has a different impact on the stock price performance. Thus, they are weighted differently when calculating the total score. With a high profitability rank of 9/10 and an impressive growth rank of 10/10, GuruFocus assigned Vulcan Materials Co the GF Score of 93 out of 100, which signals the highest outperformance potential.
Introduction to Vulcan Materials Co
Vulcan Materials Co, with a market cap of $27.68 billion, is the United States' largest producer of construction aggregates (crushed stone, sand, and gravel). Its largest markets include Texas, California, Virginia, Tennessee, Georgia, Florida, North Carolina, and Alabama. In 2022, Vulcan sold 263.4 million tons of aggregates, 12.2 million tons of asphalt mix, and 10.5 million cubic yards of ready-mix. As of Dec. 31, 2022, the company had nearly 16 billion tons of aggregates reserves.
Financial Strength Analysis
According to the Financial Strength rating, Vulcan Materials Co's robust balance sheet exhibits resilience against financial volatility, reflecting prudent management of capital structure. The Interest Coverage ratio for Vulcan Materials Co stands impressively at 6.2, underscoring its strong capability to cover its interest obligations. This robust financial position resonates with the wisdom of legendary investor Benjamin Graham, who favored companies with an interest coverage ratio of at least 5. With a favorable Debt-to-Revenue ratio of 0.58, Vulcan Materials Co's strategic handling of debt solidifies its financial health.
Profitability Rank Breakdown
The Profitability Rank shows Vulcan Materials Co's impressive standing among its peers in generating profit. Vulcan Materials Co's strong Predictability Rank of 4.0 stars out of five underscores its consistent operational performance, providing investors with increased confidence.
Growth Rank Breakdown
Ranked highly in Growth, Vulcan Materials Co demonstrates a strong commitment to expanding its business. The company's 3-Year Revenue Growth Rate is 14%, which outperforms better than 78.09% of 356 companies in the Building Materials industry. Moreover, Vulcan Materials Co has seen a robust increase in its earnings before interest, taxes, depreciation, and amortization (EBITDA) over the past few years. Specifically, the three-year growth rate stands at 6.9, and the rate over the past five years is 9.9. This trend accentuates the company's continued capability to drive growth.
Conclusion
Given the company's robust financial strength, impressive profitability, and strong growth metrics, the GuruFocus Score Rating highlights Vulcan Materials Co's unparalleled position for potential outperformance. This analysis suggests that Vulcan Materials Co is a promising investment opportunity for those seeking substantial growth in the near future.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen
