Carlisle Companies Incorporated CSL currently seems to be a smart choice for investors seeking exposure in the conglomerate space. Solid fundamentals and positive revision in earnings estimates are reflective of healthy growth potential of the company.
The Scottsdale, AZ-based company currently has a Zacks Rank #2 (Buy) and VGM Score of A.
It belongs to the Zacks Diversified Operations industry. The industry players are gaining from improving oil and gas businesses, rise in demand for air travel, infrastructure development, growth in governmental and defense demand, the improving manufacturing sector, and others.
Below we discussed why investing in Carlisle will be a smart choice.
Share Price Performance, Earnings Outlook: Market sentiments seem to be working in favor of the company over time. In the past six months, Carlisle’s share price has gained 14.1% compared with the industry’s growth of 8.8%.
Notably, in the third quarter of 2019, the company’s earnings surpassed the Zacks Consensus Estimate by 5.68% and grew 44% from the year-ago quarter. The bottom-line results reflected solid sales and improved operating margin. Average earnings surprise in the last four quarters is positive 18.58%.
Going forward, solid product portfolio, global footprint, acquired assets and improved pricing might be beneficial for the company’s bottom line.
In the past 60 days, earnings estimates for 2019 and 2020 have been revised upward, reflecting positive sentiments about Carlisle’s growth prospects. Currently, the consensus estimate for its earnings is pegged at $8.25 for 2019 and $9.15 for 2020, mirroring growth of 2.1% and 1.8% from the respective 60-day-ago figures.
Carlisle Companies Incorporated Price and Consensus
Carlisle Companies Incorporated price-consensus-chart | Carlisle Companies Incorporated Quote
Top-Line Prospects: The company has a diverse customer base in various end markets — including commercial, industrial, aerospace, defense, automotive, refinishing, construction, agriculture, marine and others. It offers products — including roofing and waterproofing, engineered, finishing equipment, and brake as well as friction system solutions. Such diversification is a boon for Carlisle.
In third-quarter 2019, the company’s revenues increased 8.4% year over year or grew 3.4% on an organic basis. The top line gained from strengthening of the non-residential construction market in North America as well as acquired assets.
For 2019, the company expects overall revenue growth in high-single digits. It believes that strengthening of the North America non-residential construction market, solid demand and buyouts will drive the Carlisle Construction Materials (“CCM”) segment’s revenues for the year in low-double digits. For the Carlisle Interconnect Technologies (“CIT”) segment, the company expects focus on improving medical technologies platform as well as strength in aerospace, medical, space and defense markets to be beneficial. For 2019, it expects the segment to witness mid-single-digit sales growth.
The Zacks Consensus Estimate for Carlisle’s revenues is pegged at $4.82 billion for 2019 and $5.07 billion for 2020. Estimates suggest year-over-year growth of 7.7% for 2019 and 5% for 2020.
Shareholder-Friendly Policies: The company remains committed to rewarding shareholders handsomely through dividend payments and share buybacks. During the first nine months of 2019, it bought back shares worth $232 million and distributed dividends totaling $75 million.
Recently, the company received the board of director’s approval for the payment of a quarterly dividend of 50 cents per share to shareholders. Notably, it had hiked the quarterly dividend payout by 25% in August 2019.
Buyouts: Carlisle has been benefiting from acquired assets. In third-quarter 2019, buyouts boosted the company’s sales growth by 5.4%.
In January 2019, Carlisle bought Petersen. The buyout boosted the company’s CCM segment. It expects annual synergies of $4 million across the metal roofing platform from the buyout. Also, with the buyout, the company easily penetrated Arizona, Texas, the Midwest and Georgia markets.
In addition, Carlisle acquired MicroConnex in May 2019, strengthening the medical technologies platform at the CIT segment. Also, it bought Ecco Finishing in July 2019 and Providien in November. The Providien buyout is predicted to enhance Carlisle’s medical technologies platform in the CIT segment.
Other Key Picks
Some other top-ranked stocks in the industry are Bunzl plc BZLFY, ITT Inc ITT and Macquarie Infrastructure Company MIC. These companies currently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 60 days, earnings estimates for Bunzl and ITT improved for the current year, while have been unchanged for Macquarie Infrastructure.
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