VMC

Vulcan is the highest-quality way to own US construction aggregates: as the country's largest supplier, with 248 production-stage and 81 development-stage quarries concentrated in high-growth Sun Belt metros, its moat is the physical irreplaceability of permitted reserves near demand. FY2025 shows that moat converting to pricing power — revenue grew only 7.1% to $7.94B, yet operating income jumped 18.7% to $1.62B and diluted EPS rose 18.4% to $8.11. Margins expanded across the board (gross 27.4%, operating 20.4%, net 13.6%), and operating cash flow surged 28.6% to $1.81B against $678M of capex, leaving roughly $1.1B of free cash that funded $438M of buybacks and $260M of dividends. This is a company earning more on each dollar of volume, not buying growth.

The balance sheet is sound but not pristine. Long-term debt fell 11% to $4.36B and liabilities/equity is a comfortable 0.96x, but cash collapsed 67% to just $183M — a thin cushion deployed into buybacks and capex. The 10-K notes long-term debt face value of $4.44B with fair value $4.33B, so refinancing risk is manageable, but the low cash balance leaves little slack if the demand cycle turns, and aggregates demand is explicitly tied to population, household and employment growth that can stall. ROE of 12.6% is only moderate for a 37x stock, a reminder that the multiple, not the returns profile, is doing the heavy lifting.