Vulcan Materials Company VMC recently announced that it will redeem outstanding notes worth $219 million on Apr 9, 2015. The notes carry an interest rate of 6.40% which are due in 2017.
This construction materials company has been displaying its liquidity prowess of late. Proceeds from the sale of non-core assets, a reduction in debt and increased earnings from the Profit Enhancement Plan have significantly strengthened Vulcan’s balance sheet.
Moreover, in mid-Feb 2015, Vulcan Materials raised its quarterly dividend from 6 cents per share to 10 cents, an increase of around 67%. This amounts to an annual dividend of 40 cents and an annual yield of 0.5%. In Feb 2014, the company raised its quarterly dividend by 400%. (Read: Vulcan (VMC) Hits 52-Week High on Solid Q4; Dividend Hike)
The largest producer of construction aggregates in the U.S, Vulcan is witnessing a sharp increase in aggregates demand as construction activity continues to improve in Vulcan’s served markets. Both residential housing starts as well as non-residential contract awards have improved steadily in 2014 and so far in 2015 due to job growth, more attractive lending standards and general economic recovery.
Vulcan Materials’ aggregate shipments have increased year over year for seven consecutive quarters and were far ahead of management’s expectations in the fourth quarter of 2014, which reported on Feb 5.
With improvement in the economic and job scenarios, non-residential construction and housing are expected to show further strength in 2015, which should result in higher demand for Vulcan’s products.
Vulcan Materials Company carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Other stocks in the building and related sector worth considering include Trex Co. Inc. TREX, Graña y Montero SAA GRAM and Toll Brothers Inc. TOL,. While Trex and Graña y Montero sport a Zacks Rank #1 (Strong Buy), Toll Brothers has the same Zacks Rank as Vulcan Materials.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment