Vulcan Materials (NYSE:VMC) versus Arcosa (NYSE:ACA) Head to Head Survey

Arcosa (NYSE:ACA) and Vulcan Materials (NYSE:VMC) are both materials companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Profitability

This table compares Arcosa and Vulcan Materials’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Arcosa	17.90%	7.90%	4.22%
Vulcan Materials	13.75%	13.05%	6.70%

Risk & Volatility

Arcosa has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Vulcan Materials has a beta of 1.05, indicating that its stock price is 5% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Arcosa and Vulcan Materials, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Arcosa	0	4	3	0	2.43
Vulcan Materials	2	6	7	1	2.44

Arcosa presently has a consensus price target of $141.25, suggesting a potential downside of 3.11%. Vulcan Materials has a consensus price target of $325.00, suggesting a potential upside of 34.91%. Given Vulcan Materials’ stronger consensus rating and higher possible upside, analysts clearly believe Vulcan Materials is more favorable than Arcosa.

Earnings and Valuation

This table compares Arcosa and Vulcan Materials”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Arcosa	$2.88 billion	2.48	$208.40 million	$9.98	14.61
Vulcan Materials	$7.94 billion	3.93	$1.08 billion	$8.47	28.44

Vulcan Materials has higher revenue and earnings than Arcosa. Arcosa is trading at a lower price-to-earnings ratio than Vulcan Materials, indicating that it is currently the more affordable of the two stocks.

Dividends

Arcosa pays an annual dividend of $0.20 per share and has a dividend yield of 0.1%. Vulcan Materials pays an annual dividend of $2.08 per share and has a dividend yield of 0.9%. Arcosa pays out 2.0% of its earnings in the form of a dividend. Vulcan Materials pays out 24.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Vulcan Materials has raised its dividend for 12 consecutive years. Vulcan Materials is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

90.7% of Arcosa shares are held by institutional investors. Comparatively, 90.4% of Vulcan Materials shares are held by institutional investors. 1.8% of Arcosa shares are held by insiders. Comparatively, 0.7% of Vulcan Materials shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Vulcan Materials beats Arcosa on 12 of the 18 factors compared between the two stocks.

About Arcosa

Arcosa, Inc., together with its subsidiaries, provides infrastructure-related products and solutions for the construction, engineered structures, and transportation markets in the United States. It operates through three segments: Construction Products, Engineered Structures, and Transportation Products. The Construction Products segment offers natural and recycled aggregates; specialty materials; and construction site support equipment, including trench shields and shoring products for residential and non-residential construction, and specialty/other products, as well as for infrastructure construction. The Engineered Structures segment offers utility structures, wind towers, traffic structures, and telecommunication structures for electricity transmission and distribution, wind power generation, highway road construction, and wireless communication markets. The Transportation Products segment offers inland barges, fiberglass barge covers, winches, marine hardware, and steel components for railcars and transportation equipment; cast components for industrial and mining sectors; and axles, circular forgings, and coupling devices for freight, tank, locomotive, and passenger rail transportation equipment, as well as other industrial uses. Arcosa, Inc. was incorporated in 2018 and is headquartered in Dallas, Texas.

About Vulcan Materials

Vulcan Materials Company, together with its subsidiaries, produces and supplies construction aggregates primarily in the United States. It operates through four segments: Aggregates, Asphalt, Concrete, and Calcium. The company provides crushed stones, sand and gravel, sand, and other aggregates; and related products and services that are applied in construction and maintenance of highways, streets, and other public works, as well as in the construction of housing and commercial, industrial, and other nonresidential facilities. It also offers asphalt mix and asphalt construction paving services; ready-mixed concrete; and calcium products for the animal feed, plastics, and water treatment industries. The company was formerly known as Virginia Holdco, Inc. and changed its name to Vulcan Materials Company. Vulcan Materials Company was founded in 1909 and is headquartered in Birmingham, Alabama.