A Look at Vulcan Materials, Another Top Dividend Grower
Vulcan’s revenue and earnings in 2015 and 2016
Vulcan Materials’ (VMC) revenue rose 14% and 5%, respectively, in 2015 and 2016. Whereas its aggregate segment’s revenue drove growth in both years, its asphalt mix segment and concrete segment saw their revenue fall. The calcium segment’s revenue rose in 2016 after a fall in 2015.
Operating expenses rose 8% and 10% in 2015 and 2016, respectively, while operating earnings rose 2% and 24%. The company recorded a substantial gain on the sale of assets in 2014, and its interest expenses have fallen over the years. These ups and downs translated into 6% and 88% EPS (earnings per share) growth in 2015 and 2016, respectively.
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Vulcan’s revenue and earnings in 1H17
Vulcan’s revenue rose 6% in 1H17, driven by every segment but the calcium segment, which has seen a fall in revenue. Its operating expenses fell 1% and its operating earnings fell 4% as substantial business interruption claims were recovered in 1H16. Its interest expenses rose along with the company’s EPS, which rose 1%, enhanced by share buybacks. The company did not generate enough free cash flow in 2015 to pay off its dividends, and has noted a negative free cash flow balance year-to-date.
The WisdomTree US Dividend Growth ETF (DGRW) is a dividend fund with exposure to Vulcan Materials. It has a dividend yield of 2.7% and a PE (price-to-earnings) ratio of 20.3x. The Vanguard High Dividend Yield ETF (VYM), also a dividend fund, has 3% exposure to basic materials. It has a 3% dividend yield and a PE ratio of 21.6x. In the next part, we’ll look at the company’s dividends and compare its performance with that of broad market indexes (SPX-INDEX) (SPY) (DJIA-INDEX) (DIA) (COMP-INDEX) (ONEQ).