Here's Why You Should Hold on to Carlisle (CSL) Stock Now
Carlisle Companies Incorporated CSL is backed by continued demand for energy-efficient building products despite forex woes and softness in the Carlisle Construction Materials (CCM) segment due to continued destocking in the channel and project delays.
What’s Aiding CSL?
Business Strength: Carlisle stands to gain from its focus on delivering innovative new products, driven by increased investment in research and development. Also, continued demand for energy-efficient building products, particularly for non-residential reroofing products, is driving the company’s performance. Strength in commercial aerospace platforms, accretive pricing policies and rebound in demand for new aircrafts are driving the Carlisle Interconnect Technologies (CIT) segment's growth. For 2023, the company expects the segment's revenues to increase in the mid-single-digit percentage year over year.
Benefits from Vision 2025 Program: The Vision 2025 program is supporting Carlisle’s performance. Under the Vision 2025 program, Carlisle seeks to achieve above-market organic growth, pursue synergistic acquisitions and further leverage its Carlisle Operating System (COS) culture to drive efficiencies through business processes apart from returning cash to its shareholders. Contribution from COS and price realization are supporting the company’s margins. CSL’s gross margin increased 60 basis points year over year in the second quarter of 2023.
Rewards to Shareholders: Carlisle utilizes its cash flow to reward its shareholders through dividend payouts and share-repurchase programs. In August 2023, the company hiked its dividend by 13% to 85 cents per share. In the first six months of 2023, Carlisle rewarded its shareholders with a dividend payout of $77.2 million, up 36.2% year over year and repurchased shares worth $250 million, up 42.9% year over year.
In light of the above-mentioned positives, we believe, investors should retain CSL stock for now, as suggested by its current Zacks Rank #3 (Hold). Shares of the company have gained 12% against the industry’s 0.9% decline in the year-to-date period.
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