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Carlisle (CSL) Gains From Business Strength Amid Headwinds
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Carlisle Companies Incorporated (CSL - Free Report) has been witnessing strength in the Construction Materials segment, driven by the solid demand for reroofing products. Strength in the non-residential construction market, supported by inventory normalization and growing re-roof activity, has been driving the segment’s performance. Its Weatherproofing Technologies segment is also performing well backed by the solid demand for building envelope solutions supported by repair and remodeling activities in the residential construction market. Given its strength across its businesses, Carlisle expects overall revenues to increase 12% in 2024 from the year-ago level.
The company believes in adding complementary businesses to its portfolio via acquisitions. In May 2024, Carlisle completed the acquisition of MTL Holdings from GreyLion Partners. The inclusion of MTL’s solid pre-fabricated edge metal products portfolio will enable CSL to expand its customer offerings and boost its architectural metals business.
Also, the acquisition of Polar Industries (November 2023) expanded Carlisle’s polystyrene and graphite polystyrene portfolio, thus boosting its Weatherproofing Technologies segment. Buyouts had a positive impact of 2.1% on net sales growth in the second quarter of 2024.
Carlisle remains focused on increasing its shareholders’ wealth through dividend payouts and share buybacks. For instance, in the first six months of 2024, it paid out a dividend of $81.7 million and bought back shares worth $700 million. The quarterly dividend rate was hiked 18% in August 2024.
Image Source: Zacks Investment Research
Over the past year, this Zacks Rank #3 (Hold) company’s shares have gained 33.9% compared with the industry’s 12.4% growth.
However, the company has been dealing with rising costs and expenses. In the first half of 2024, its selling and administrative expenses and cost of sales rose 16.4% and 8.8%, respectively, on a year-over-year basis. The increase was attributable to higher raw material and labor costs.
Also, the high debt level is an added concern. Exiting the second quarter, CSL’s long-term debt and current maturities totaled $2.7 billion. Considering the high debt level, its cash and cash equivalents of $1.7 billion do not look impressive.
Stocks to Consider
We have highlighted three better-ranked stocks, namely, Federal Signal Corporation (FSS - Free Report) , PDD Holdings Inc. (PDD - Free Report) and Applied Industrial Technologies (AIT - Free Report) . While Federal Signal sports a Zacks Rank #1 (Strong Buy), PDD Holdings and Applied Industrial currently carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Federal Signal delivered a trailing four-quarter average earnings surprise of 12.3%. In the past 60 days, the Zacks Consensus Estimate for FSS’ 2024 earnings has increased 5.2%.
PDD Holdings delivered a trailing four-quarter average earnings surprise of 45.6%. In the past 60 days, the consensus estimate for PDD’s 2024 earnings has increased 1.1%.
Applied Industrial delivered a trailing four-quarter average earnings surprise of 8.2%. In the past 60 days, the Zacks Consensus Estimate for AIT’s 2024 earnings has remained stable.
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Carlisle (CSL) Gains From Business Strength Amid Headwinds
Carlisle Companies Incorporated (CSL - Free Report) has been witnessing strength in the Construction Materials segment, driven by the solid demand for reroofing products. Strength in the non-residential construction market, supported by inventory normalization and growing re-roof activity, has been driving the segment’s performance. Its Weatherproofing Technologies segment is also performing well backed by the solid demand for building envelope solutions supported by repair and remodeling activities in the residential construction market. Given its strength across its businesses, Carlisle expects overall revenues to increase 12% in 2024 from the year-ago level.
The company believes in adding complementary businesses to its portfolio via acquisitions. In May 2024, Carlisle completed the acquisition of MTL Holdings from GreyLion Partners. The inclusion of MTL’s solid pre-fabricated edge metal products portfolio will enable CSL to expand its customer offerings and boost its architectural metals business.
Also, the acquisition of Polar Industries (November 2023) expanded Carlisle’s polystyrene and graphite polystyrene portfolio, thus boosting its Weatherproofing Technologies segment. Buyouts had a positive impact of 2.1% on net sales growth in the second quarter of 2024.
Carlisle remains focused on increasing its shareholders’ wealth through dividend payouts and share buybacks. For instance, in the first six months of 2024, it paid out a dividend of $81.7 million and bought back shares worth $700 million. The quarterly dividend rate was hiked 18% in August 2024.
Image Source: Zacks Investment Research
Over the past year, this Zacks Rank #3 (Hold) company’s shares have gained 33.9% compared with the industry’s 12.4% growth.
However, the company has been dealing with rising costs and expenses. In the first half of 2024, its selling and administrative expenses and cost of sales rose 16.4% and 8.8%, respectively, on a year-over-year basis. The increase was attributable to higher raw material and labor costs.
Also, the high debt level is an added concern. Exiting the second quarter, CSL’s long-term debt and current maturities totaled $2.7 billion. Considering the high debt level, its cash and cash equivalents of $1.7 billion do not look impressive.
Stocks to Consider
We have highlighted three better-ranked stocks, namely, Federal Signal Corporation (FSS - Free Report) , PDD Holdings Inc. (PDD - Free Report) and Applied Industrial Technologies (AIT - Free Report) . While Federal Signal sports a Zacks Rank #1 (Strong Buy), PDD Holdings and Applied Industrial currently carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Federal Signal delivered a trailing four-quarter average earnings surprise of 12.3%. In the past 60 days, the Zacks Consensus Estimate for FSS’ 2024 earnings has increased 5.2%.
PDD Holdings delivered a trailing four-quarter average earnings surprise of 45.6%. In the past 60 days, the consensus estimate for PDD’s 2024 earnings has increased 1.1%.
Applied Industrial delivered a trailing four-quarter average earnings surprise of 8.2%. In the past 60 days, the Zacks Consensus Estimate for AIT’s 2024 earnings has remained stable.