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Carlisle (CSL) to Gain From Multi-Market Presence, Buyouts

Zacks Equity Research

On Mar 28, we issued an updated research report on Carlisle Companies Inc. CSL.

Over the past year, this Zacks Rank #1 (Strong Buy) stock has yielded a return of 14.4% against industry’s decline of 0.8%.

Existing Scenario

Carlisle has been gaining from its diversified business structure, which enables it to tap opportunities and neutralize operating risks associated with a single market. Of late, one of the company's major segments, Carlisle Construction Materials, has been witnessing significant improvement on account of solid demand in the North American non-residential construction markets and continued progress on price realization. Also, strength in aerospace and defense markets as well as solid med-tech platform and SatCom markets have set the tone for strong future growth.

Moreover, Carlisle intends to finance new growth-based investments, acquire businesses and boost shareholders’ remuneration with increased liquidity. In this regard, the company’s buyout of Petersen Aluminum Corporation (January 2019) is worth mentioning. The acquisition will expand the company’s product offerings in the metal roofing platform.

Further, this takeover will enable Carlisle to easily penetrate the markets of Arizona, Texas, the Midwest and Georgia. Notably, acquisitions had a positive contribution of 4.3% of sales growth in the fourth quarter of 2018.

Further, the company remains highly committed toward increasing shareholders’ wealth through share repurchase programs and paying dividends. In this regard, in 2018, it repurchased approximately $460 million of its shares and distributed dividends totaling $93.5 million.

In addition, in light of the continued operational improvements, including cost savings from the Carlisle Operating System and overall positive market conditions, the company anticipates overall revenue growth to be in the high single-digit for 2019.

Other Key Picks

Some other top-ranked stocks in the same space are Macquarie Infrastructure Company MIC, Federal Signal Corp. FSS and United Technologies Corp. UTX. All these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Macquarie surpassed estimates twice in the trailing four quarters, the average being 0.51%.

Federal Signal exceeded estimates in each of the trailing four quarters, the average being 21.65%.

United Technologies surpassed estimates in each of the trailing four quarters, the average being 14.87%.

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