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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Vulcan Materials Company (XNYS:VMC) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
VMC
Name:
VULCAN MATERIALS COMPANY (XNYS:VMC)
Sector:
15.20M
Industry:
Building Materials
CEO:
Mr. J. Thomas Hill
Total Employees:
11,437
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -161.94% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF VULCAN MATERIALS COMPANY(VMC) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND BUILDING MATERIALS INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
164.95
One Month Price Target:
$165.69
Six Month Price Target :
$169.36
Likely Price in One Year's Time:
Ticker:
$173.78
Likely Trading Range Today Under (Normal Volatility)
$164.34
Price Upper limit ($) :
$165.73
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$156.65
This week:
$146.38
This month :
$127.81
Other Primary facts
Market Cap:
21.85B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
132.90M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.77%
-17.61%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$203.48
$185.77
$126.42
$144.13
Medium risk (<10%) entry points
Buy Call
Sell Call
$180.01
Buy Put:
Sell Put:
$176.23
$149.84
$153.67
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
VMC
Sharpe Ratio:
1.75%
Comparison:
VMC, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -16.97% lower than the industry
& is -23.27% lower than the market/S&P 500 average
Average Returns/Yield of
VMC
Daily returns:
0.05%
Weekly returns:
0.26%
Monthly returns:
1.04%
Yearly returns:
16.13%
Comparison of returns:
Average annual returns/yield (last 3 years) is -22.39% below industry average
Classification:
VMC, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.6
Statistical test of Returns:
VMC has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.48%
Weekly Volatility:
5.54%
Monthly Volatility:
11.08%
Yearly Volatility:
38.37%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.62%
Volatility in last five trading days has been -75.13% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.03%
Weekly VaR:
-11.26%
Monthly VaR:
-22.51%
How Much Can the price of
VMC
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-77.99%
This translates to price declining to:
$133.09
This translates to price declining to:
$36.30
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
VMC is a 58.91% riskier investment compared to the market/S&P 500 & is 36.14% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -10.13% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
VMC
Beta in relation to market/S&P 500--0.80
Expected beta in 1 year's time:
0.614
Expected beta in 3 year's time:
0.869
Unlevered (debt free) Beta:
0.516
Beta in relation to Nasdaq (XNAS):
0.671
Beta in relation to all global stocks::
0.677
Beta Comparison & Analysis
Beta of competitors/peers::
0.986
Beta is -19.19% lower than peers
Average Industry Beta:
0.907
Beta is -12.20% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
7.40%
Sustainable growth rate is -50.11% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.039
Alpha is -42.17% below industry average alpha yield
Alpha is 249% higher than market/& is unsustainably high
Analysis of Cost of Capital of
VMC
Equity cost of capital:
0.086
Equity cost of capital is -8.09% below industry mean WACC
Unlevered (without debt) cost of capital:
5.58%
Before-tax cost of debt:
3.26%
After-tax cost of debt:
2.58%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.58%
WACC is -9.74% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$45.33
Revenue growth rate per share of (3Y):
3.32
Annual revenue growth rate is -12.34% below industry average
EPS:
$4.51
Expected Annual growth rate of EPS (3Y):
2.64%
Expected future EPS growth rate is -89.50% lower than the Building Materials industry
Free cash flow (FCF) per share:
$3.80
Balance sheet equity growth per share: 32.42%
Equity growth rate per share is -212.94% lower than the industry
Debt per share
$33.91
EBITDA per share
$10.64
Valuation Analysis Today of
VMC
P/E Ratio:
36.13
P/E Ratio of Competitors/Peers:
27.9
P/E ratio is 29.49% higher than main peers & is 65.68% higher than the industry
Stock price/value with industry average P/E ratio: $98.36
VMC is 67.70% overvalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $13.59
Present value of the expected future dividends only: $6.41
P/S (Price to Sales ratio):
3.64
Price to sales ratio is -2.96% below the industry mean
P/B (Price to book value ratio):
3.32
Price to free cash flow: 43.37
-
Net income growth rate (3Y):
29.87%
Net income growth rate is -45.90% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 8.84%
Dividend yeild: 0.71%
Previous Dividend: $0.40
Previous adjusted dividend: $0.40
Previous Dividend: $1.17
Expected next dividend best case: $0.42
Expected next dividend worst case: $0.38
Average dividend payment (long-term): $0.36
Average dividend increase/decrease (growth rate) % per period: -8.15%
Expected next dividend payment date: 09/08/2022
Expected next dividend record date: 25/08/2022
Expected next dividend declaration date: 08/11/2022
Previous dividend payment date: 06/10/2022
Previous dividend record date: 27/05/2022
Previous dividend declaration date: 13/05/2022
Dividend History:
2022-05-26--$0.40
2021-11-16--$2.00
2021-08-17--$0.37
2022-02-28--$0.40
2021-11-15--$0.37
2021-05-27--$0.37
Dividend growth rate is -79.79% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
68.53%
Net debt to equity ratio:
68.24%
Debt to assets ratio:
32.51%
Net debt to assets ratio:
32.37%
Debt-to-asset ratio is -18.13% below industry average
Ability to repay debt:
Interest coverage ratio:
9.4
Interest coverage ratio is -82.11% less than industry average
Looking forward:
Debt growth rate:
338.71%
Annual debt growth is 376% higher than industry average debt growth rate
Debt repayment rate in last quarter: 2.17%
Analysis of Key Statistics
Correlation of price movement with the market:
0.595
Statistical significance of correlation:
VMC has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.612
Stock price is -2.84% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.612
Correlation of price movement with Nasdaq (^IXIC):
0.022
Covariance of price movement with the market:
0.031
Kurtosis
9.803
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.075
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
VMC
Gross Profit Margin Ratio:
95%
Operating Profit Margin Ratio:
15.08%
Operating profit margin is -8.17% lower than the industry
Net Profit Margin Ratio:
95%
Effective Tax Rate:
20.70%
Effective tax rate is 0.39% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
9.15%
Return on equity (ROE) is -46.46% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.34%
Return on assets (ROA) is -51.26% lower than the industry
Financial Leverage:
1.5x
Current Ratio:
1.86
Current ratio is 26.87% above industry average
Cash Conversion Cycle (days):
66.6
Cash conversion cycle is 345.32% above industry average
The remaining useful life of property plant & equipment is: 1.6 years
Stock based compensation to net income ratio:
1.25%
In-depth Efficiency Analysis
Revenue generated per employee:
526.8K
Each employee generates -18% less revenue than industry average revenue per employee
EBITDA generated per employee:
123.6K
Each employee generates -40% less EBITDA than industry average revenue per employee
Profit generated per employee:
52.6K
Each employee generates -49% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
1.3K
Each employee generates -91% less free cash flow than industry average revenue per employee
Assets/Capital per employee
1.1M
Each employee generates -91% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
VMC
ALBEMARLE CORPORATION (XNYS:ALB)
MARTIN MARIETTA MATERIALS, INC. (XNYS:MLM)
Franco-Nevada Corporation (XNYS:FNV)
BARRICK GOLD CORPORATION (XNYS:GOLD)
LyondellBasell Industries NV (XNYS:LYB)
NUCOR CORPORATION (XNYS:NUE)
AVANTOR, INC. (XNYS:AVTR)
CORTEVA, INC. (XNYS:CTVA)
POSCO Holdings Inc. (XNYS:PKX)
Current Analyst Ratings
Strong buy�29%
Buy�21%
Hold�13%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
6.02B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
4.61B
1.41B
-
-
448.06M
-
62.22M
510.27M
1.00M
150.47M
503.63M
1.41B
908.29M
601.90M
764.11M
158.15M
601.90M
Statement of Cash Flow
Date:
Period:
-
Differed Income Tax :
1.10M
Stock Based Compensation :
7.50M
Change in Working Capital :
- 77800.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
152.70M
Net Cash Provided by Operating Activities:
175.60M
Investments in PP&E:
- 160400.00K
Net Acquisitions:
- 148200.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
123.10M
-
123.10M
917.90M
524.50M
97.10M
1.66B
6.41B
3.71B
1.75B
36.50M
-
295.30M
12.20B
-
13.86B
-
103.90M
-
-
788.80M
892.70M
4.51B
689.10M
6.37B
-
7.26B
132.90M
3.79B
- 151600.0K
-
March 31, 2022 at 6:00:00 AM
5.12B
6.58B
13.84B
-
4.61B
4.5B
-
6.10M
- 302500.00K
- 99800.00K
-
-
- 53200.00K
171.40M
18.40M
-
- 108500.00K
133.00M
241.50M
175.60M
- 160400.00K
15.20M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
VMC
2023
2024
2025
2026
2027
$182.72
$192.50
$202.80
$213.65
$225.09