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Vulcan Materials Company (VMC) is the nation’s largest producer of construction aggregates, including crushed stone, sand and gravel, as well as a major producer of aggregate-based construction materials, such as asphalt and ready-mix concrete.
The company generated 76% of its revenue from aggregates and 17% from asphalt during the third quarter of 2020. In geographic terms, 44% of sales were in the Gulf Coast, 35% were in the east and 21% were in the west. The products are typically sold to private industry and not directly to government entities, although 55% of aggregates have historically been used in publicly funded construction, such as highways or government buildings.
Vulcan Materials reported fourth-quarter revenue that fell by 0.8% to $1.18 billion, which was better than analysts expected by about $20 million. On the bottom line, the company reported non-GAAP earnings of $1.07 per share, which was eight cents ahead of consensus estimates.
Management believes that construction-sector employment gains in key markets are a positive signal that activity levels are recovering across the company’s target markets. Strong residential construction activity has also been encouraging, while data centers, distribution centers and warehouses are driving private nonresidential project awards.
The company raised its quarterly dividend by 8.8% to $0.37 per share, which represents a 0.9% forward yield. The dividend is payable on March 15, 2021 to shareholders on record as of March 1, 2021.
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