Vulcan Materials is the leading producer of aggregates in the U.S. with ~10% market share in 2021. The company has the #1 or #2 position in ~90% of its markets and its facilities are strategically located in 35 of the top 50 MSAs in the U.S. across 22 states. Vulcan also provides asphalt and ready-mix concrete in certain states, which are vertically integrated with its aggregates production facilities. The company has over 22k customers.
Excellent primer on a wonderful company - I had been talking to a few friends about it and reviewing a few older write ups the week prior! It's funny how either someone is immediately drawn to rock pits or the idea doesn't click.
Hi. Great writeup. Thanks for these insights and helpful details. Very interesting. A few questions - if they have the best locations (closest to customers) and thus the lowest transportation costs, how are they able to charge a premium price. Are they leveraging their location power and that there are few alternatives? Does Vulcan thus have the highest margins given its pricing power and lower costs.
Why no acquisitions recently?
What's the valuation and why more attractive than MLM?
What's the current leverage and do they buyback stock?
Great analysis! I really like the limited cyclicality/stability of the public customer base. Question remains, though, if the upside is already baked into their current share price. Trading at a trailing EV/EBITFDA of 16.4x and P/E >40x, it isn't exactly cheap by historical measures.
Thanks for the write-up! Quick question:
"In 2021, 42% Vulcan’s aggregate revenues were for publicly funded construction, of which 22% were for highway construction." Do you mean ~half of Vulcan's aggregate revenue for publicly funded construction is from highway construction? Or do you mean 22% of publicly funded construction revenue is from highway construction?
Are you sharing portfolio on jika.io or etoro by any chance? I like your analysis and I'd follow you if you are.