4-Star Stocks Poised to Pop: Vulcan Materials

Based on the aggregated intelligence of 135,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, cement, asphalt, and gravel supplier Vulcan Materials (NYSE: VMC  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Vulcan's business and see what CAPS investors are saying about the stock right now.

Vulcan facts

Headquarters (founded)

Birmingham, Ala. (1909)

Market Cap

$4.79 billion

Industry

Construction Materials

Trailing-12-Month Revenue

$3.43 billion

Management

Chairman/CEO Donald James (since 1997)

CFO Daniel Sansone (since 2005)

Return on Equity (average, last three years)

11.8%

Competitors

Cemex (NYSE: CX  )

Martin Marietta Materials (NYSE: MLM  )

CAPS Members Bullish on VMC Also Bullish on

General Electric (NYSE: GE  )

Johnson & Johnson (NYSE: JNJ  )

CAPS Members Bearish on VMC Also Bearish on

Home Depot (NYSE: HD  )

Toll Brothers (NYSE: TOL  )

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS.

Over on CAPS, fully 393 of the 434 members who have rated Vulcan -- some 90.5% -- believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars littlebigguy and MBLacey, both of whom are ranked in the top 20% of our community.

In March, littlebigguy reminded Fools that Vulcan "is one of the top aggregate providers in the US." Our CAPS member concludes: "If Congress ever gets off their collective duffs and acts on their promise of infrastructure rebuilding, [Vulcan] stands to be a huge beneficiary."

In a pitch from last month, MBLacey helped cement that bullishness:

Vulcan Materials is the largest producer of aggregates in the US, and also manufactures cement, concrete and asphalt. It should be a good performer with the amount of infrastructure projects required just to keep the vast area of highways in this country in good shape, let alone to modernize and update them to keep up with growing traffic. Other large infrastructure projects are going to require large amounts of cement and concrete as well. Pays a decent dividend.

Even though Vulcan subsequently announced a dividend cut and secondary offering of shares, the CAPS member followed that initial pitch with guarded optimism, pointing out that "these actions will shore up the balance sheet, and infrastructure spending should begin ramping up in 2010. With states cutting infrastructure at the same time as the Federal Government is increasing, there could be some delay or contracts could be spread out farther than currently planned."

What do you think about Vulcan, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 135,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Vulcan and Home Depot are Motley Fool Inside Value recommendations. Johnson & Johnson is an Income Investor pick. Cemex is a choice of Stock Advisor and Global Gains, and the Fool owns shares of it. The Fool's disclosure policy always gets a perfect score.


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  • Report this Comment On June 24, 2009, at 11:05 AM, weiwentg wrote:

    I agree. Vulcan got singed but will survive. Cemex, a peer, was much more badly damaged by the debt on its balance sheet.

  • Report this Comment On June 24, 2009, at 3:57 PM, diesel3446 wrote:

    Vulcan's timing in the purchase of Florida Rock Ind. may not have been perfect, but when the building resumes Florida Rock will be very profitable.

    They have always run efficiently and will be ahead of their

    peers because they pre-bought there fleet to avoid '07 & '10 emissioned vehicles.

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