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Here's Why You Should Add Carlisle (CSL) to Your Portfolio

Carlisle Companies Incorporated CSL is well poised for growth, courtesy of strength across its businesses, acquisitions, and focus on improving the product line and operational excellence.

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Zacks Investment Research

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The company has a market capitalization of $19.6 billion. Over the past three months, it has gained 18.5% against the industry’s decline of 4.7%. CSL currently sports a Zacks Rank #1 (Strong Buy).

Let’s delve into the factors that have been aiding the firm for a while now.

Business Strength: Carlisle is experiencing strong momentum in the Construction Materials segment, driven by robust demand for reroofing products. Strength in the non-residential construction market, on the back of inventory normalization and growing re-roof activity, has been driving the segment’s performance. Its Weatherproofing Technologies segment is also poised to benefit from repair and remodel demand across the building envelope in residential market. Given its strength across its businesses, Carlisle anticipates overall revenues to increase 10% in 2024 from the year-ago levels.

Acquisition Benefits: The company remains focused on acquiring businesses to gain access to new customers, regions and product lines. In March 2024, Carlisle signed a deal to acquire 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 MBTechnology in February 2022 strengthened its Construction Materials segment's building products platform, boosting its energy-efficient solution offerings.

Shareholder-Friendly Policies: CSL remains committed to rewarding its shareholders through dividend payouts and share buybacks. For instance, in 2023, it rewarded its shareholders with a dividend payout of $160.3 million and bought back shares worth $900 million.

Also, in the first quarter of 2024, it paid out dividend of $41.5 million and bought back shares worth $150 million. It hiked its dividend by 13% to 85 cents per share in August 2023.

Business Initiatives: Under the Vision 2030 program, management seeks to achieve above-market organic growth, focus on product innovation and deliver a solid adjusted EBITDA margin, apart from returning cash to its shareholders. The contribution from Carlisle Operating System and price realization are supporting the company’s margins. Its operating margin increased 700 basis points year over year in the first quarter of 2024.

Other Key Picks

Some other top-ranked companies from the same space are discussed below.

Griffon Corporation GFF presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

It has a trailing four-quarter average earnings surprise of 33.5%. The Zacks Consensus Estimate for GFF’s fiscal 2024 earnings has increased 4.8% in the past 60 days.

ITT Inc. ITT currently carries a Zacks Rank #2. The company delivered a trailing four-quarter average earnings surprise of 8%. In the past 60 days, the Zacks Consensus Estimate for ITT’s 2024 earnings has increased 1.6%. The stock has risen 24% in the past six months.

Brady Corporation BRC presently carries a Zacks Rank #2 and has a trailing four-quarter earnings surprise of 6.7%, on average. The Zacks Consensus Estimate for BRC’s fiscal 2024 earnings has increased 3.1% in the past 60 days.


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