Alabama’s Vulcan Materials — Rebuilding America (Literally)

Construction aggregates business reflects U.S. economy

   

Vulcan Materials Company (NYSE:VMC) is a producer of “construction aggregates,” including sand and gravel, along with asphalt and concrete. It’s not a glamorous business and admittedly a very difficult business right now as governments slash infrastructure spending and real estate is hit hard.

But hey, that’s America right now.

Vulcan is a substantive company, doing about $2.5 billion in annual revenue and employing roughly 7,100 folks across the U.S. in a range of jobs from engineering to geology as well as unskilled laborers. As the broader construction industry rises and falls, so does this stock since stone, asphalt and cement are crucial to any major nonresidential projects.

Vulcan is more than 100 years old, finding its roots in Birmingham Slag Company. This family-owned construction materials company was hit hard in the Great Depression, but thanks to a connection to the Tennessee Valley Authority projects of the 1940s and the wartime efforts around World War II, it bounced back fast. It became a big player in a number of military projects across the south. Then in the 1950s, the company saw boom times again as the Eisenhower highway program took off.

Will there be another renaissance in federal projects and infrastructure spending? If so, Vulcan will be there just as it was in the past.

If not, then Vulcan will continue to be a bellwether (for better or for worse) for the U.S. construction industry — particularly efforts in Alabama and the South.

Check out the complete list of Real America Index components, along with an interactive map of short-term and long-term returns.

Jeff Reeves is editor of InvestorPlace.com. As of this writing, he did not own a position in any of the stocks named here. Follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook.


Article printed from InvestorPlace Media, http://investorplace.com/real-america-index/alabama-vulcan-materials-vmc-america/.

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