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Owens Corning (OC) Rewards Shareholders With 50% Dividend Hike

Owens Corning OC is focused on enhancing shareholders’ returns. The company, with world-leading capabilities in building materials systems and composite solutions, announced a quarterly cash dividend hike of 50%. This marks the company’s nineth consecutive annual dividend increase.

Owens Corning will pay out a quarterly dividend of 52 cents per share on Jan 19, 2023, to shareholders on record as of Jan 4. The dividend yield is 2.28%, based on the closing share price of $91.16 on Dec 2.

Additionally, the board of directors has approved a share repurchase authorization for up to 10 million shares. This is in addition to the previously announced share buyback program in which approximately 7.4 million shares remained available for buyback as of Sep 30, 2022.

Share price of the company gained 1.2% during the trading session on Dec 2, 2022.

Chief Financial Officer Ken Parks, said, “Moving forward, we will remain committed to maintaining an investment-grade balance sheet and returning at least 50% of free cash flow to shareholders over time."

Owens Corning has been executing regular quarterly cash dividend payments. The recent hike instills greater optimism in investors. The move indicates the company’s commitment to delivering long-term shareholder value as well as reflects on its confidence in its financial position and ability to generate sufficient cash flows.

At September-end, the company had $751 million in cash and cash equivalents. During the first nine months of 2022, the company returned $639 million to shareholders through share repurchases and dividends.

Strategic Initiatives

The company has been progressing well on its key strategic initiatives to outperform the market in the near term. Owens Corning has been focusing on technical and other building insulation businesses on the back of geographic and product expansion through acquisitions as well as on network optimization and manufacturing performance for the Insulation business.

In Composites, it is focused on key markets and geographies where it has a market-leading position like North America, Europe and India. In the Roofing segment, Owens Corning is leveraging vertical integration, material science capabilities, and commercial strength to design as well as market unique roofing shingles and components that attract contractors, homeowners and distributors.

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Management believes that the company is well placed to continue with its growth momentum and keep boosting shareholders’ wealth, backed by strong pricing action, structural improvements and strategic investments. The Zacks Rank #3 (Hold) stock has gained more than 0.7% so far this year, broadly outperforming the Zacks Building Products - Miscellaneous industry’s 21.4% decline. The uptrend can be attributed to the above-mentioned tailwinds and a strong surprise history, having topped analysts’ expectations in the trailing 14 quarters.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some better-ranked stocks which warrant a look in the Construction sector include:

United Rentals URI — carrying a Zacks Rank #2 (Buy) — is the largest equipment rental company in the world, with an integrated network of 1,390 rental locations in the United States, Canada and Europe.

URI’s expected earnings growth rates for 2022 and 2023 are 47.3% and 12.5%, respectively. The Zacks Consensus Estimate for current-year and next-year earnings has improved to $32.50 and 36.57 per share from $32.41 and $36.27 per share, respectively, over the past 30 days.

EMCOR Group, Inc. EME — carrying a Zacks Rank #2 — is one of the leading providers of mechanical and electrical construction, industrial and energy infrastructure, as well as building services for a diverse range of businesses.

EME’s expected earnings growth rates for 2022 and 2023 are 10.2% and 17%, respectively. The Zacks Consensus Estimate for current-year and next-year earnings has improved 0.4% and 3.3%, respectively, over the past 30 days.

Sterling Infrastructure, Inc. STRL — also carrying a Zacks Rank #2 — has been benefiting from broad-based growth across the e-infrastructure, building and transportation solutions segments.

STRL’s expected earnings growth rates for 2022 and 2023 are 47.4% and 6.3%, respectively. The Zacks Consensus Estimate for current-year and next-year earnings has improved 4.3% and 3.4%, respectively, over the past 30 days.

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EMCOR Group, Inc. (EME) : Free Stock Analysis Report

United Rentals, Inc. (URI) : Free Stock Analysis Report

Owens Corning Inc (OC) : Free Stock Analysis Report

Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report

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