Definitive Analysis
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Vulcan Materials Company (VMC)

Company Dividend Discount ModelIndustry: Construction MaterialsSector: Basic Materials

Valuation Snapshot

Stable Growth$198.05 - $525.37$302.84
Multi-Stage$135.33 - $147.87$141.49
Blended Fair Value$222.16
Current Price$307.62
Upside-27.78%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS8.31%23.81%1.841.721.601.481.361.231.111.000.800.40
YoY Growth--7.01%7.43%8.25%8.98%9.91%10.71%11.92%24.45%99.82%84.23%
Dividend Yield--0.79%0.64%0.93%0.80%0.80%1.14%0.93%0.87%0.66%0.38%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,122.70
(-) Cash Dividends Paid (M)256.20
(=) Cash Retained (M)866.50
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)224.54140.3484.20
Cash Retained (M)866.50866.50866.50
(-) Cash Required (M)-224.54-140.34-84.20
(=) Excess Retained (M)641.96726.16782.30
(/) Shares Outstanding (M)132.98132.98132.98
(=) Excess Retained per Share4.835.465.88
LTM Dividend per Share1.931.931.93
(+) Excess Retained per Share4.835.465.88
(=) Adjusted Dividend6.757.397.81
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Fair Value$198.05$302.84$525.37
Upside / Downside-35.62%-1.55%70.79%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,122.701,195.681,273.391,356.171,444.321,538.201,584.34
Payout Ratio22.82%36.26%49.69%63.13%76.56%90.00%92.50%
Projected Dividends (M)256.20433.50632.78856.121,105.831,384.381,465.52

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)393.62397.35401.08
Year 2 PV (M)521.70531.64541.67
Year 3 PV (M)640.90659.30678.05
Year 4 PV (M)751.68780.58810.32
Year 5 PV (M)854.45895.72938.57
PV of Terminal Value (M)14,833.1615,549.6016,293.47
Equity Value (M)17,995.5118,814.2019,663.16
Shares Outstanding (M)132.98132.98132.98
Fair Value$135.33$141.49$147.87
Upside / Downside-56.01%-54.01%-51.93%

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