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Why You Should Add Owens Corning (OC) to Your Portfolio
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Shares of Owens Corning (OC - Free Report) have gained more than 69% year to date, substantially outperforming the 17.7% growth of its industry. Additionally, this Toledo, OH-based world leader in building materials systems and composite solutions outperformed the industry in each of the four-week, 12-week and 52-week time frames.
After all, the overall outlook for the U.S construction sector remains positive with healthy economy, strong job market and historically low mortgage rates that will continue to drive stocks higher.
Moreover, the Zacks Consensus Estimate for earnings for both the fourth quarter and the current year have increased 5.2% and 0.9%, respectively, in the last 30 days, thus reflecting optimism in the stock’s prospects and substantiating its Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
What Makes Owens Corning a Solid Pick?
Stellar Performance: Last month, Owens Corning came up with robust quarterly results, with the company’s earnings and revenues increasing 12% and 15.7%, respectively. Even in the first nine months of 2017, the company’s adjusted earnings improved 13.4% on 11.3% year over year growth in net sales. The robust performance was due to the solid contribution from its three segments, namely, Composites, Insulation and Roofing.
Notably, its Roofing segment, accounting for more than 40% of its revenues, registered 16.5% growth in sales over the time frame, reflecting strong shingle and component volumes, ongoing strong reroof demand and stepped up activity. Year-to-date pricing gain continues to offset the impact of asphalt inflation. In the first nine months of 2017, industry shingle shipments were up about 7% driven primarily by storm activity and replacement demand.
We remain optimistic about the company’s prospects given favorable end-market trends from housing and residential repair/remodel spending, good incremental margins in the composites and insulation businesses, and strong margins in the roofing business.
Paroc Group Acquisition: Late last month, the company entered into an agreement to acquire Paroc Group (from CVC Capital Partners), a leading European manufacturer of building and technical mineral wool insulation. The acquisition is expected to close in early 2018, which should be accretive to 2018 EPS, with more meaningful gains expected in 2019 post synergies.
The Paroc acquisition will expand Owens Corning’s mineral wool technology portfolio, enhance its presence in the European insulation market, provide access to a variety of new end-use markets and will boost the Insulation sales mix outside the United States and Canada to 35%.
Apart from Paroc, Owens Corning completed the $560 million acquisition of Pittsburgh Corning in June. The buyout of Pittsburgh Corning will further expand Owens Corning's commercial and industrial product offerings and expand its presence in Europe and Asia.
Owens Corning is expanding into commercial and industrial markets with the acquisition of Pittsburgh Corning as well as Paroc. These buyouts will boost revenues outside the United States, thereby helping its bottom line as well.
Solid Estimated EPS Growth: The company’s fourth-quarter earnings are expected to increase 41.5% year over year. The company’s EPS is expected to grow 19.2% for the current year, comfortably outpacing the industry’s average projected growth of 7.2%.
In 2018, Owens Corning is expected to come up a stellar performance with its bottom line expected to grow 18.3%, almost in line with the industry’s expected 18.1% growth rate.
Meanwhile, the company’s sales are expected to increase 8.8% in the current quarter and 10.6% for the current year. For 2018, the company’s projected sales growth is a healthy 7.2%. Hence, Owens Corning makes a great pick in terms of growth investment supported by a Growth Score of B.
Solid VGM Score: The company has an impressive VGM Score of B. Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics. In fact, our research shows that stocks with VGM Scores of A or B when combined with a Zacks Rank #1 or 2 (Buy) make solid investment choices.
Other Stocks to Consider
Investors may also consider stocks like Patrick Industries, Inc. (PATK - Free Report) , United Rentals, Inc. (URI - Free Report) and Aspen Aerogels, Inc. (ASPN - Free Report) .
Patrick Industries sports a Zacks Rank #1 and is likely to witness a rise of 24.5% in earnings for the current year.
United Rentals, also a Zacks Rank #1 stock, is expected to witness 22.1% growth in earnings this year.
Aspen Aerogels, a Zacks Rank #2 stock, is expected to witness 50% growth in current quarter earnings.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
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Why You Should Add Owens Corning (OC) to Your Portfolio
Shares of Owens Corning (OC - Free Report) have gained more than 69% year to date, substantially outperforming the 17.7% growth of its industry. Additionally, this Toledo, OH-based world leader in building materials systems and composite solutions outperformed the industry in each of the four-week, 12-week and 52-week time frames.
After all, the overall outlook for the U.S construction sector remains positive with healthy economy, strong job market and historically low mortgage rates that will continue to drive stocks higher.
Moreover, the Zacks Consensus Estimate for earnings for both the fourth quarter and the current year have increased 5.2% and 0.9%, respectively, in the last 30 days, thus reflecting optimism in the stock’s prospects and substantiating its Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
What Makes Owens Corning a Solid Pick?
Stellar Performance: Last month, Owens Corning came up with robust quarterly results, with the company’s earnings and revenues increasing 12% and 15.7%, respectively. Even in the first nine months of 2017, the company’s adjusted earnings improved 13.4% on 11.3% year over year growth in net sales. The robust performance was due to the solid contribution from its three segments, namely, Composites, Insulation and Roofing.
Notably, its Roofing segment, accounting for more than 40% of its revenues, registered 16.5% growth in sales over the time frame, reflecting strong shingle and component volumes, ongoing strong reroof demand and stepped up activity. Year-to-date pricing gain continues to offset the impact of asphalt inflation. In the first nine months of 2017, industry shingle shipments were up about 7% driven primarily by storm activity and replacement demand.
We remain optimistic about the company’s prospects given favorable end-market trends from housing and residential repair/remodel spending, good incremental margins in the composites and insulation businesses, and strong margins in the roofing business.
Paroc Group Acquisition: Late last month, the company entered into an agreement to acquire Paroc Group (from CVC Capital Partners), a leading European manufacturer of building and technical mineral wool insulation. The acquisition is expected to close in early 2018, which should be accretive to 2018 EPS, with more meaningful gains expected in 2019 post synergies.
The Paroc acquisition will expand Owens Corning’s mineral wool technology portfolio, enhance its presence in the European insulation market, provide access to a variety of new end-use markets and will boost the Insulation sales mix outside the United States and Canada to 35%.
Apart from Paroc, Owens Corning completed the $560 million acquisition of Pittsburgh Corning in June. The buyout of Pittsburgh Corning will further expand Owens Corning's commercial and industrial product offerings and expand its presence in Europe and Asia.
Owens Corning is expanding into commercial and industrial markets with the acquisition of Pittsburgh Corning as well as Paroc. These buyouts will boost revenues outside the United States, thereby helping its bottom line as well.
Solid Estimated EPS Growth: The company’s fourth-quarter earnings are expected to increase 41.5% year over year. The company’s EPS is expected to grow 19.2% for the current year, comfortably outpacing the industry’s average projected growth of 7.2%.
In 2018, Owens Corning is expected to come up a stellar performance with its bottom line expected to grow 18.3%, almost in line with the industry’s expected 18.1% growth rate.
Meanwhile, the company’s sales are expected to increase 8.8% in the current quarter and 10.6% for the current year. For 2018, the company’s projected sales growth is a healthy 7.2%. Hence, Owens Corning makes a great pick in terms of growth investment supported by a Growth Score of B.
Solid VGM Score: The company has an impressive VGM Score of B. Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics. In fact, our research shows that stocks with VGM Scores of A or B when combined with a Zacks Rank #1 or 2 (Buy) make solid investment choices.
Other Stocks to Consider
Investors may also consider stocks like Patrick Industries, Inc. (PATK - Free Report) , United Rentals, Inc. (URI - Free Report) and Aspen Aerogels, Inc. (ASPN - Free Report) .
Patrick Industries sports a Zacks Rank #1 and is likely to witness a rise of 24.5% in earnings for the current year.
United Rentals, also a Zacks Rank #1 stock, is expected to witness 22.1% growth in earnings this year.
Aspen Aerogels, a Zacks Rank #2 stock, is expected to witness 50% growth in current quarter earnings.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>