Carlisle Companies Incorporated currently boasts promising prospects on strength in its end markets, solid product portfolio, acquired assets and a sound capital-deployment strategy.
The Zacks Rank #2 (Buy) company has a market capitalization of $10.9 billion. In the past six months, it has gained 40% compared with the industry’s growth of 19.3%.
Image Source: Zacks Investment Research
Let’s delve into the factors that make investment in the company a smart choice at the moment.
Solid End Markets: Carlisle is poised to benefit from robust and strengthening reroofing market in the United States and growth in the polyurethane and architectural metals platform. Strength across the company’s automotive refinish and transportation end markets and an improved outlook for industrial capital spending are also likely to support its performance in the quarters ahead.
Acquisition Benefits: The company intends to solidify its product portfolio and leverage business opportunities through the addition of assets. The company’s acquired Ecco Finishing business (July 2019) has boosted its growth opportunities in the Sealants and Adhesives platforms. Also, the Providien buyout (November 2019) has strengthened its medical technologies platform. Its agreement to acquire Henry Company (July 2021), will likely strengthen its product offerings for repair and restoration works as well as construction activities. In both first and second quarters of 2021, acquisitions had a contribution of 0.4% to revenue growth.
Shareholder-friendly Policies: Carlisle believes in rewarding shareholders handsomely through dividend payouts and share repurchases. In the first six months of 2021, the company distributed dividends totaling $56 million and repurchased shares worth $265.6 million. In August 2020, it hiked the quarterly dividend rate by 5% to 52.5 cents. Also, its board of directors authorized the repurchase of 5 million shares in February 2021, which is in addition to the existing share repurchase authorization.
Estimate Revisions: In the past 30 days, analysts have increasingly become bullish on the company, as evident from positive earnings estimate revisions. The Zacks Consensus Estimate for its 2021 earnings has trended up from $8.69 to $9.16 on two upward estimate revisions versus none downward. Over the same timeframe, the consensus estimate for 2022 earnings has trended up from $10.83 to $11.48 on two upward estimate revisions against none downward.
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