VOL. XCIV, NO. 247
★ WIDE MOAT STOCKS & COMPETITIVE ADVANTAGES ★
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Vulcan Materials Company
VMC · New York Stock Exchange
Weighted average of segment moat scores, combining moat strength, durability, confidence, market structure, pricing power, and market share.
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Overview
Vulcan Materials Company is the largest U.S. supplier of construction aggregates and operates three segments: Aggregates, Asphalt, and Concrete. Aggregates (the profit core) benefits from scarce, permitted reserves near demand centers, high transport costs that localize markets, and a dense network of quarries and distribution yards. Asphalt and Concrete are smaller, more competitive local businesses where vertical integration with Vulcan's aggregates and local plant proximity support reliability and economics, but with less structural scarcity than Aggregates. Key risks include construction cyclicality, growing use of recycled substitutes, permitting/environmental constraints, and regulatory/geopolitical uncertainty tied to the Mexico asset shutdown.
Primary segment
Aggregates
Market structure
Oligopoly
Market share
8%-11% (implied)
HHI: —
Coverage
3 segments · 6 tags
Updated 2026-01-01
Segments
Aggregates
Construction aggregates (crushed stone, sand & gravel)
Revenue
74.4%
Structure
Oligopoly
Pricing
strong
Share
8%-11% (implied)
Peers
Asphalt
Asphalt mix and paving services
Revenue
16.8%
Structure
Competitive
Pricing
moderate
Share
—
Peers
Concrete
Ready-mixed concrete
Revenue
8.8%
Structure
Competitive
Pricing
moderate
Share
—
Peers
Moat Claims
Aggregates
Construction aggregates (crushed stone, sand & gravel)
FY2024 segment external revenues $5.52B (~74% of company total). FY2024 aggregates shipments 219.9M tons and proven and probable reserves 16.5B tons (Form 10-K FY2024).
Permits Rights Of Way
Legal
Permits Rights Of Way
Strength
Durability
Confidence
Evidence
New quarries (and meaningful expansions) are multi-year projects and face zoning/environmental permitting and community opposition, constraining new supply in many urban/suburban markets.
Erosion risks
- Permitting reform that materially increases new quarry supply
- Community opposition or litigation delaying renewals/expansions
- Stricter environmental or land-use regulation
Leading indicators
- Permitting/approval timelines for new sites and expansions
- Reserve replacement rate in core markets
- Frequency of contested permits and related litigation
Counterarguments
- Competitors with already-permitted reserves can expand within existing footprints
- Rail/barge or import terminals can supply some regions despite local quarry constraints
Geographic Natural
Supply
Geographic Natural
Strength
Durability
Confidence
Evidence
Aggregates are heavy/low value; transport costs can quickly exceed material cost, localizing markets around quarries and advantaging reserves near high-growth demand centers.
Erosion risks
- Sustained declines in fuel/freight costs reducing transport penalty
- Expanded rail/water logistics or imports that widen supply radius
- Demand shifting away from Vulcan-served metros
Leading indicators
- Fuel price and freight cost trends
- Share of tons moved via rail/barge/ship vs truck
- Metro-level pricing spreads vs adjacent markets
Counterarguments
- Some regions can be served economically via water/rail, weakening locality advantages
- Local markets can still have multiple quarries with similar proximity to demand
Physical Network Density
Supply
Physical Network Density
Strength
Durability
Confidence
Evidence
A large footprint of quarries and distribution yards enables reliable supply, flexible fulfillment, and lower delivered costs versus smaller competitors.
Erosion risks
- Competitors expanding their own distribution yards and logistics capabilities
- Trucking labor shortages and higher delivered-cost inflation
- Weather-related disruptions affecting local supply chains
Leading indicators
- Number of active facilities and distribution yards
- On-time delivery / service-level performance
- Delivered price vs peers in key metro markets
Counterarguments
- Distribution yards and logistics can be replicated with capital and land access
- In many markets, reserve location matters more than network breadth
Scale Economies Unit Cost
Supply
Scale Economies Unit Cost
Strength
Durability
Confidence
Evidence
Large scale enables shared best practices and more efficient procurement of equipment and services across the footprint.
Erosion risks
- Industry consolidation giving peers similar purchasing scale
- Diseconomies of scale (complexity, bureaucracy)
Leading indicators
- Unit cash cost per ton vs peers
- Procurement savings and integration synergies realization
Counterarguments
- Best practices can diffuse across the industry over time
- Local geology and haul distances can dominate unit cost differences
Asphalt
Asphalt mix and paving services
FY2024 segment external revenues $1.25B (~17% of company total). More competitive and project/bid influenced than Aggregates; integration helps, but not a true scarcity moat.
Supply Chain Control
Supply
Supply Chain Control
Strength
Durability
Confidence
Evidence
Vertical integration with Aggregates: aggregates are the dominant physical input and are primarily supplied internally, supporting cost control and supply reliability.
Erosion risks
- Competitors owning quarries or securing long-term aggregate supply
- Bitumen/asphalt binder price volatility affecting margins
- Competitive bidding compressing margins
Leading indicators
- Asphalt gross profit per ton trend
- Internal vs external aggregates sourcing mix
- Win rate on major projects (public and private)
Counterarguments
- If internal transfer pricing is near market, cost advantage may be limited
- Asphalt work is often bid-driven, limiting sustainable pricing advantage
Geographic Natural
Supply
Geographic Natural
Strength
Durability
Confidence
Evidence
Asphalt mix hardens rapidly, limiting delivery radius; plant proximity improves responsiveness and reduces delivered cost, but is typically replicable by local competitors.
Erosion risks
- Competitors siting plants closer to major projects
- Permitting/zoning allowing additional local capacity
- Demand shocks reducing utilization
Leading indicators
- Plant utilization rates
- Average delivery distance per ton
- Local competitive capacity additions
Counterarguments
- Asphalt plants can often be added with moderate capex in attractive markets
- Customers can switch suppliers project-by-project
Concrete
Ready-mixed concrete
FY2024 segment external revenues $0.65B (~9% of company total). Highly local product; supply-chain risk often centers on cement availability/pricing.
Geographic Natural
Supply
Geographic Natural
Strength
Durability
Confidence
Evidence
Ready-mix hardens rapidly; delivery is time/distance constrained, making concrete markets highly local and advantaging plants positioned near demand.
Erosion risks
- Local competitors adding plant/dispatch capacity
- Labor and trucking constraints increasing delivered cost
- Construction slowdowns reducing utilization
Leading indicators
- Concrete shipments per plant
- Metro-level price per cubic yard vs inflation
- Customer retention across major jobs
Counterarguments
- Ready-mix is often commoditized; customers can switch suppliers between projects
- Barriers to build/operate a plant may be lower than for a quarry (market-dependent)
Supply Chain Control
Supply
Supply Chain Control
Strength
Durability
Confidence
Evidence
Vertical integration with Aggregates: aggregates are a large share of ready-mix by weight and are primarily supplied internally, improving reliability and potentially economics.
Erosion risks
- Cement supply constraints or price spikes (cement sourced from a few suppliers per market)
- Competitors integrating upstream through quarry ownership or long-term contracts
- Transfer prices converging to market levels
Leading indicators
- Cement availability and delivered cement prices in core markets
- Concrete gross profit per cubic yard trend
- Internal aggregate transfer volumes to concrete operations
Counterarguments
- Cement (not aggregates) can be the binding constraint in some markets
- Competitors can access aggregates via contracts even without owning quarries
Evidence
New quarry sites often take years to develop... increasingly difficult to permit new sites or expand existing sites due to community resistance.
Directly supports permitting and development lead-time as a barrier to new competing capacity.
Construction aggregates have a high weight-to-price ratio, and transportation costs can quickly exceed the cost of the aggregates.
Supports the economic basis for localized markets and location-driven advantage.
Having the most extensive distribution network of any aggregates producer sets us apart.
Supports network density / distribution advantage claim.
As of December 31, 2024, we had 423 active aggregates facilities.
Quantifies the scale of the physical network backing the distribution claim.
Our 423 active aggregates facilities allow us to... procure equipment and services more efficiently.
Supports scale-based sourcing/procurement advantage claim.
Showing 5 of 13 sources.
Risks & Indicators
Erosion risks
- Permitting reform that materially increases new quarry supply
- Community opposition or litigation delaying renewals/expansions
- Stricter environmental or land-use regulation
- Sustained declines in fuel/freight costs reducing transport penalty
- Expanded rail/water logistics or imports that widen supply radius
- Demand shifting away from Vulcan-served metros
Leading indicators
- Permitting/approval timelines for new sites and expansions
- Reserve replacement rate in core markets
- Frequency of contested permits and related litigation
- Fuel price and freight cost trends
- Share of tons moved via rail/barge/ship vs truck
- Metro-level pricing spreads vs adjacent markets
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