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Vulcan Materials (VMC) Cheers Investors With 7% Dividend Hike
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Vulcan Materials Company (VMC - Free Report) recently announced a hike in its quarterly dividend payout. The company raised its quarterly dividend by 7%, which reflects its intention to utilize free cash to boost shareholders’ returns.
The board of directors of this leading producer of construction aggregates approved a quarterly dividend payout of 46 cents per share ($1.84 per share annually), up from the previous dividend payout of 43 cents per share ($1.72 per share annually).
The amount will be paid out on Mar 18, 2024, to shareholders of record as of Mar 4. Based on the closing price of $240 per share on Feb 9, 2024, the stock has a dividend yield of 0.8% and a payout ratio of 26%.
The company's dividend increase signifies its sturdy growth business model, backed by robust cash flow, financial stability and dedication to adding value for shareholders.
Following the announcement, shares of VMC gained 0.1% in the after-hours trading session on Feb 9.
What’s Driving the Dividend Policy?
Vulcan has been witnessing strong pricing, underpinned by growing public demand (mainly transport) and operational discipline. Public sector construction includes spending by federal, state and local governments for the construction of highways, bridges, airports, dams, roads and other infrastructure construction. During the third-quarter earnings call, the company noted that trailing 12-month highway starts were up 18%, and 2024 state budgets are at record levels.
Improvement in pricing, fixed cost leverage and operating efficiencies helped it achieve 19% growth in unit profitability of the Aggregates segment and 19% improvement in adjusted EBITDA in third-quarter 2023.
Although Aggregates shipments fell 2% during the quarter, pricing momentum and solid operational execution drove a 21% improvement in cash gross profit per ton. The company remains focused on compounding improvements of strategic disciplines and the durability of its aggregate-led business. Also, unit profitability throughout the cycle through fixed cost leverage, price growth and operating efficiencies bodes well.
Image Source: Zacks Investment Research
Shares of this Zacks Rank #3 (Hold) company have surged 6.6% in the past six months compared with the Zacks Building Products - Concrete and Aggregates industry’s 9.3% growth. The company is likely to benefit from consistent strategic execution, strong performance of the aggregate-led business, large industrial projects demand and the improving single-family residential market.
Key Picks
Here are some better-ranked stocks from the Construction sector.
Installed Building Products, Inc. (IBP - Free Report) currently sports a Zacks Rank of 1 (Strong Buy). IBP delivered a trailing four-quarter earnings surprise of 7.3%, on average. The stock has surged 84.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for IBP’s 2024 sales and earnings per share (EPS) indicates growth of 6.4% and 7.2%, respectively, from the prior-year levels.
TopBuild Corp. (BLD - Free Report) presently carries a Zacks Rank of 2 (Buy). It has a trailing four-quarter earnings surprise of 14.3%, on average. Shares of BLD have increased 96.2% in the past year.
The Zacks Consensus Estimate for BLD’s 2024 sales and EPS indicates a rise of 7.2% and 5.6%, respectively, from the prior-year levels.
Armstrong World Industries, Inc. (AWI - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter earnings surprise of 7.9%, on average. Shares of AWI have increased 29.5% in the past year.
The Zacks Consensus Estimate for AWI’s 2024 sales and EPS indicates a rise of 1.4% and 7.5%, respectively, from the prior-year levels.
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Vulcan Materials (VMC) Cheers Investors With 7% Dividend Hike
Vulcan Materials Company (VMC - Free Report) recently announced a hike in its quarterly dividend payout. The company raised its quarterly dividend by 7%, which reflects its intention to utilize free cash to boost shareholders’ returns.
The board of directors of this leading producer of construction aggregates approved a quarterly dividend payout of 46 cents per share ($1.84 per share annually), up from the previous dividend payout of 43 cents per share ($1.72 per share annually).
The amount will be paid out on Mar 18, 2024, to shareholders of record as of Mar 4. Based on the closing price of $240 per share on Feb 9, 2024, the stock has a dividend yield of 0.8% and a payout ratio of 26%.
The company's dividend increase signifies its sturdy growth business model, backed by robust cash flow, financial stability and dedication to adding value for shareholders.
Following the announcement, shares of VMC gained 0.1% in the after-hours trading session on Feb 9.
What’s Driving the Dividend Policy?
Vulcan has been witnessing strong pricing, underpinned by growing public demand (mainly transport) and operational discipline. Public sector construction includes spending by federal, state and local governments for the construction of highways, bridges, airports, dams, roads and other infrastructure construction. During the third-quarter earnings call, the company noted that trailing 12-month highway starts were up 18%, and 2024 state budgets are at record levels.
Improvement in pricing, fixed cost leverage and operating efficiencies helped it achieve 19% growth in unit profitability of the Aggregates segment and 19% improvement in adjusted EBITDA in third-quarter 2023.
Although Aggregates shipments fell 2% during the quarter, pricing momentum and solid operational execution drove a 21% improvement in cash gross profit per ton. The company remains focused on compounding improvements of strategic disciplines and the durability of its aggregate-led business. Also, unit profitability throughout the cycle through fixed cost leverage, price growth and operating efficiencies bodes well.
Image Source: Zacks Investment Research
Shares of this Zacks Rank #3 (Hold) company have surged 6.6% in the past six months compared with the Zacks Building Products - Concrete and Aggregates industry’s 9.3% growth. The company is likely to benefit from consistent strategic execution, strong performance of the aggregate-led business, large industrial projects demand and the improving single-family residential market.
Key Picks
Here are some better-ranked stocks from the Construction sector.
Installed Building Products, Inc. (IBP - Free Report) currently sports a Zacks Rank of 1 (Strong Buy). IBP delivered a trailing four-quarter earnings surprise of 7.3%, on average. The stock has surged 84.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for IBP’s 2024 sales and earnings per share (EPS) indicates growth of 6.4% and 7.2%, respectively, from the prior-year levels.
TopBuild Corp. (BLD - Free Report) presently carries a Zacks Rank of 2 (Buy). It has a trailing four-quarter earnings surprise of 14.3%, on average. Shares of BLD have increased 96.2% in the past year.
The Zacks Consensus Estimate for BLD’s 2024 sales and EPS indicates a rise of 7.2% and 5.6%, respectively, from the prior-year levels.
Armstrong World Industries, Inc. (AWI - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter earnings surprise of 7.9%, on average. Shares of AWI have increased 29.5% in the past year.
The Zacks Consensus Estimate for AWI’s 2024 sales and EPS indicates a rise of 1.4% and 7.5%, respectively, from the prior-year levels.