Reviewing Vulcan Materials (VMC) & Hecla Mining (HL)

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

Insider and Institutional Ownership

92.4% of Vulcan Materials shares are held by institutional investors. Comparatively, 60.2% of Hecla Mining shares are held by institutional investors. 0.9% of Vulcan Materials shares are held by company insiders. Comparatively, 1.7% of Hecla Mining shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Dividends

Vulcan Materials pays an annual dividend of $1.12 per share and has a dividend yield of 0.9%. Hecla Mining pays an annual dividend of $0.01 per share and has a dividend yield of 0.3%. Vulcan Materials pays out 36.8% of its earnings in the form of a dividend. Hecla Mining pays out 10.0% 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 increased its dividend for 4 consecutive years. Vulcan Materials is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Vulcan Materials and Hecla Mining’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Vulcan Materials $3.89 billion 4.39 $601.18 million $3.04 42.50
Hecla Mining $577.78 million 2.75 -$23.51 million $0.10 39.60

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

Volatility and Risk

Vulcan Materials has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500. Comparatively, Hecla Mining has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for Vulcan Materials and Hecla Mining, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Vulcan Materials 0 1 7 0 2.88
Hecla Mining 0 2 4 0 2.67

Vulcan Materials presently has a consensus price target of $141.13, indicating a potential upside of 9.23%. Hecla Mining has a consensus price target of $5.25, indicating a potential upside of 32.58%. Given Hecla Mining’s higher probable upside, analysts plainly believe Hecla Mining is more favorable than Vulcan Materials.

Profitability

This table compares Vulcan Materials and Hecla Mining’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Vulcan Materials 15.40% 8.76% 4.39%
Hecla Mining -7.32% 1.66% 1.04%

Summary

Vulcan Materials beats Hecla Mining on 14 of the 17 factors compared between the two stocks.

Vulcan Materials Company Profile

Vulcan Materials Company produces and supplies construction aggregates, asphalt mix, and ready-mixed concrete primarily in the United States. It operates through four segments: Aggregates, Asphalt, Concrete, and Calcium. The Aggregates segment provides crushed stone, sand and gravel, sand, and other aggregates; and related products and services for use in the 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. The Asphalt Mix segment offers asphalt mix in Arizona, California, New Mexico, Tennessee, and Texas. The Concrete segment provides ready-mixed concrete in California, Georgia, Maryland, New Mexico, Texas, Virginia, Washington D.C., and the Bahamas. The Calcium segment mines, produces, and sells calcium products for the animal feed, plastics, and water treatment industries. The company was formerly known as Virginia Holdco, Inc. Vulcan Materials Company was founded in 1909 and is headquartered in Birmingham, Alabama.

Hecla Mining Company Profile

Hecla Mining Company, together with its subsidiaries, discovers, acquires, develops, and produces precious and base metal deposits worldwide. The company offers zinc, lead, and bulk flotation concentrates to custom smelters and brokers; and unrefined gold and silver bullion bars to precious metals traders. It owns 100% interests in the Greens Creek mine located on Admiralty Island, Alaska; Lucky Friday mine located in northern Idaho; Casa Berardi mine located in the Abitibi region of northwestern Quebec, Canada; and San Sebastian mine located in the state of Durango, Mexico. Hecla Mining Company was founded in 1891 and is headquartered in Coeur d'Alene, Idaho.

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