Vulcan Materials Company VMC recently announced a hike in dividend payout, maintaining its long-standing commitment to increasing stockholder returns. This hike is reflective of the company’s focus on a balanced capital allocation strategy via balance sheet strength and operational excellence.

The board of directors of this largest producer of construction aggregates in the United States approved a 7% hike in quarterly cash dividend to 49 cents per share ($1.96 annually) from 46 cents ($1.84 annually). This new dividend will be paid on March 24, 2025, to its shareholders of record as of March 10. Based on the closing price of $270.46 per share on Feb. 14, 2025, VMC stock has a dividend yield of 0.8% and a payout ratio of 28.3%.

Shares of VMC gained 0.4% during the trading session last Friday.

What’s Driving the Dividend Policy?

Vulcan Materials — which is scheduled to report fourth-quarter 2024 results on Feb. 18 — remains focused on creating shareholder value through share repurchases and dividends. During the first nine months of 2024, the company returned $183.6 million to shareholders through dividends, an increase from $171.6 million in the year-ago period.

Vulcan has been witnessing strong pricing, underpinned by growing public demand (mainly transport) and operational discipline. Public sector construction includes spending by federal, state and local governments for the construction of highways, bridges, airports, dams, roads and other infrastructure construction.

Vulcan reported a 10% increase in aggregates cash gross profit per ton in the third quarter of 2024, marking the eighth consecutive quarter of double-digit growth. Additionally, Vulcan’s recent acquisition of Wake Stone Corporation will extend its presence in the high-growth Carolinas region. The company's "Vulcan Way of Selling and Operating" principles are key drivers in enhancing profitability and seamlessly integrating new operations.

Also, public infrastructure projects bolstered by state and federal funding are expected to support ongoing construction demand, thereby benefiting Vulcan.

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Shares of this Zacks Rank #3 (Hold) company have gained 10.7% in the past six months compared with the Zacks Building Products - Concrete and Aggregates industry’s 5% growth. The company is likely to benefit from consistent strategic execution, strong performance of the aggregate-led business, large industrial projects demand and the expected improvement in the single-family residential market.

Key Picks

Here are some better-ranked stocks from the Construction sector.

Frontdoor, Inc. FTDR currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

FTDR delivered a trailing four-quarter earnings surprise of 269%, on average. The stock has gained 27.3% in the past six months. The Zacks Consensus Estimate for FTDR’s 2025 sales and earnings per share (EPS) indicates an increase of 6.4% and 1.4%, respectively, from a year ago.

Dycom Industries, Inc. DY currently carries a Zacks Rank #2 (Buy). DY delivered a trailing four-quarter earnings surprise of 16.6%, on average. The stock has lost 8.4% in the past six months.

The Zacks Consensus Estimate for DY’s fiscal 2026 sales and EPS indicates an increase of 14% and 14.3%, respectively, from a year ago.

Armstrong World Industries AWI currently carries a Zacks Rank #2. MTZ delivered a trailing four-quarter earnings surprise of 10.5%, on average. The stock has gained 25.6% in the past six months.

The Zacks Consensus Estimate for AWI’s 2025 sales and EPS indicates an increase of 6.1% and 11.2%, respectively, from a year ago.

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Vulcan Materials Company (VMC) : Free Stock Analysis Report

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