Here's Why Investors Should Buy Owens Corning (OC) Stock Now
Owens Corning OC has been riding on its focus on product innovation, strategic initiatives and acquisitions. Shares of OC have gained 72.1% year to date (YTD), outperforming the Zacks Building Products - Miscellaneous industry’s rise of 36%.
This Zacks Rank #1 (Strong Buy) stock has a long-term earnings growth rate of 7.9%, which highlights its strength. The Zacks Consensus Estimate for earnings per share has moved upward over the past 30 days to $13.59 from $13.18. This depicts analysts’ optimism about the stock’s potential. The estimated figure indicates 5.5% year-over-year growth.
We believe that Owens Corning offers a sound investment opportunity, which is evident from its VGM Score of B.
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What Makes the Stock an Attractive Pick?
Focus on Innovation: Owens Corning remains committed to driving innovation in both product development and process enhancement, aimed at not only serving its customers but also fostering further expansion. The company foresees substantial benefits stemming from its current array of products, coupled with ongoing endeavors to optimize production efficiency. The company's initiatives to introduce new products are proving to be quite promising.
During the first half of 2023, OC continued to accelerate its product and process innovation, unveiling 17 newer refreshed products across core platforms in Roofing, Insulation, and Composite businesses. The company introduced Owens Corning lumber in the second quarter of 2023, an extension of last year's WearDeck acquisition. This structural composite material offers an alternative to traditional wood and steel, demonstrating the company's commitment to diversifying its product portfolio.
Acquisitions: Acquisitions play a pivotal role in Owens Corning's growth strategy. The company is actively evaluating opportunities for bolt-on acquisitions that capitalize on its commercial, operational, and geographic prowess, while also broadening its range of offerings in different functional areas. On Sep 1, 2022, OC acquired the remaining 50% interest in its joint venture company — Fiberteq, LLC (previously acquired 50% stake in July 2022). The acquisition advances the Composites strategy to focus on high-value material solutions and expands Owens Corning's capacity to produce non-woven mats. On Aug 1, 2022, the company completed the acquisition of Cortland, IL-based manufacturer of spray polyurethane foam insulation for building and construction applications, Natural Polymers, LLC.
Higher ROE: Owens Corning's trailing 12-month return on equity (ROE) is indicative of its growth potential. The company’s ROE of 25.6% compares favorably with the industry’s 6.8%, which signals more efficiency in using shareholders’ funds than peers.
Other Key Picks
Some other top-ranked stocks in the same space are:
Gibraltar Industries, Inc. ROCK manufactures and distributes products to the industrial and buildings market. The Zacks Consensus Estimate for ROCK’s 2023 earnings has moved north to $3.97 per share from $3.56 in the past 30 days.
Shares of ROCK have gained 66.6% YTD. ROCK’s expected earnings growth rate for 2023 is 16.8% and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Masco MAS manufactures, sells and installs home improvement and building products. Shares of MAS have gained 28% YTD.
Masco presently flaunts a Zacks Rank #1. The Zacks Consensus Estimate for MAS’ 2023 earnings has moved north to $3.60 per share from $3.56 in the past 30 days.
Fluor Corporation FLR benefits from its diverse presence in various markets, which allows it to reduce the impact of market fluctuations. The company adopts a strategic approach by maintaining a well-balanced business portfolio, enabling it to prioritize stable markets while taking advantage of opportunities in cyclical markets when the timing is appropriate.
FLR presently sports a Zacks Rank #1. Shares of FLR have gained 3% YTD. Nonetheless, its expected earnings growth rate for 2023 is 141.5%. The Zacks Consensus Estimate for FLR’s 2023 earnings has moved north to $1.98 per share from $1.74 in the past 30 days.
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Owens Corning Inc (OC) : Free Stock Analysis Report
