Vulcan Materials Company (VMC) has recently announced that Donald M. James, Executive Chairman of the board of directors, will retire on Jan 15, 2015. James became the executive chairman in July 2014 and following his retirement, will act as a non-Executive Chairman in the company.
James (65) has been a part of Vulcan Materials’ board since 1996 and has previously acted as President (1996 to 1997), Chief Executive Officer (1997 to 2014). He was named chairman in 1997. James will be succeeded by Tom Hill, President and CEO of Vulcan Materials.
Alabama-based Vulcan Materials also witnessed another change in its board recently with the retirement of H. Allen Franklin, one of the board members, effective Dec 31, 2014. The company stated that the retirement was due to health reasons. Franklin had been on the board since 2001 and had served as Chairman, President and Chief Executive Officer of Southern Company.
The fundamentals of this building materials manufacturing company are pretty solid on the back of the company’s strong aggregate reserve positions, continued profit improvements, divestitures of non-strategic operations and significant debt reduction.
The company’s last reported third quarter 2014 was marked by solid earnings per share and revenues, which surpassed both the Zacks Consensus Estimate and the year over year levels. Increase in earnings per share was driven by solid aggregates volume growth and improved margins and unit profitability.
Revenue was driven by higher aggregate shipments and pricing and improving results in other segments. Strong aggregate shipments and pricing was driven by solid trends in private construction which includes both residential and non-residential. Among Non-Aggregates, the Asphalt Mix segment performed well in the quarter. Management expects Vulcan-served markets to perform well in 2015, thanks to strong construction trends.
However, limited visibility on aggregates demand growth in public construction and uncertainty surrounding expiration of the current highway bill next year keep us on the sidelines.
Vulcan Materials carries a Zacks Rank #3 (Hold).
Other Stocks to Consider
Better-ranked stocks in the building/construction industry worth considering include HeidelbergCement AG (HDELY), Owens Corning (OC), Headwaters Incorporated (HW). All the three companies sport a Zacks Rank #1 (Strong Buy).
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