Here's Why Carlisle (CSL) Stock is an Attractive Pick Now
Carlisle Companies Incorporated CSL is gaining from strength in the Carlisle Construction Materials (CCM) segment, expansion efforts, Vision 2030 program and a sound capital-deployment strategy.
Let’s delve into the factors that make this current Zacks Rank #1 (Strong Buy) company a smart investment choice at the moment.
Business Strength: Carlisle's diversified business structure enables it to tap opportunities and neutralize operating risks associated with a single market. The company stands to gain from its focus on delivering innovative new products, driven by increased investment in research and development. Despite the uncertainties, continued demand for reroofing products bodes well for the CCM segment. The company expects the segment’s sales to increase approximately 6% in 2024 from the year-ago period.
Within the Carlisle Weatherproofing Technologies (CWT) segment, repair and remodel demand across the building envelope and in both commercial and residential markets is expected to provide a balanced exposure to mitigate the ebbs and flows of the economic cycles. For the CWT segment, revenues are expected to grow 4% year over year in 2024.
Accretive Acquisitions: The company solidified its product portfolio and leveraged business opportunities by adding assets. In March 2024, Carlisle signed a definitive deal to acquire MTL Holdings from the U.S. private equity firm, GreyLion Partners. The transaction value has been fixed at $410 million in cash. The inclusion of MTL’s solid pre-fabricated edge metal products portfolio, supported by its strong designing and manufacturing capabilities, will enable CSL to expand its customer offerings and boost its architectural metals business. The buyout is expected to be completed in the second quarter of 2024, conditioned on the fulfilment of certain customary closing conditions. The company’s acquisition of MBTechnology, Inc. (February 2022) strengthened the CCM segment's building products platform, thus boosting its energy-efficient solution offerings.
Vision 2030 Program: Under the Vision 2030 program, Carlisle aims to unleash the full potential of its pure play building products portfolio with best-in-class returns. Keeping 2023 as the base year, the company expects to witness compound annual growth rate of more than 5% and adjusted earnings per share of $40 or more by 2030. Also, contribution from Carlisle Operating System and price realization are supporting the company’s margins. The operating margin increased 440 basis points year over year in the fourth quarter of 2023.
Rewards to Shareholders: Carlisle is committed to rewarding its shareholders handsomely through dividend payments and share buybacks. In August 2023, the company hiked its dividend by 13% to 85 cents per share. In 2023, Carlisle rewarded its shareholders with a dividend payout of $160.3 million, up 19.3% year over year. The amount spent on share buyback totaled $900 million, up more than 100% year over year. At the end of fourth-quarter 2023, Carlisle was left to buy back 7.4 million shares.
Northward Estimate Revision: The Zacks Consensus Estimate for CSL’s 2024 earnings has been revised 8.2% upward in the past 60 days.
Price Performance: Shares of CSL have gained 66.8% in the past year, outperforming the industry’s 11.7% increase.
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Carlisle Companies Incorporated (CSL) : Free Stock Analysis Report
