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SiteOne Landscape Supply, Inc. SITE yesterday announced that it acquired privately owned Semco Stone, LLC. The financial terms of the transaction have been kept under wraps by the parties involved.
Semco Stone buyout is the seventh acquisition made by SiteOne Landscape so far in 2021. The announcement came within a fortnight of delivering better-than-expected results for the third quarter of 2021. Earnings beat in the quarter was 41.46%.
Yesterday, SiteOne Landscape’s shares lost 0.97%, ending the trading session at $246.05.
Inside the Headlines
Midwest-based Semco Stone is a well-known natural stone distributor. Its product offerings include building stones, landscaping stones, outdoor living products, brentwood stones, custom-cut stones, and engraved stones. Its wholesale facilities are located in Kansas City, MO; Cincinnati, OH; Columbus, OH; and Perryville, MO.
With the addition of Semco Stone, SiteOne Landscape is well-positioned to leverage the benefits of its extended product offerings, customer base, and experienced team. Also, the buyout will enhance SiteOne Landscape’s storage capabilities and the revenue base.
SiteOne Landscape considers acquisitions as one of the preferred modes for expanding product offerings, services, customer base and market penetration. In the first three quarters of 2021, the amount invested for purchasing businesses (net of acquired cash) totaled $71.1 million. For the third quarter, buyouts boosted sales by $73.5 million or 10% on a year-over-year basis.
In August 2021, SiteOne Landscape acquired Green Brothers Earth Works and Southern Landscape Supply, while adding Rock & Block Hardscape Supply to its portfolio in May 2021. Also, SiteOne Landscape purchased Melrose Irrigation Supply and Sales, and Timberwall Landscape & Masonry Products in May.
Arizona Stone & Architectural Products and Solstice Stone were purchased and added to SiteOne Landscape’s portfolio in April. Also, Lucky Landscape Supply, LLC was acquired in February.
As disclosed with the third-quarter 2021 earnings release, the six acquisitions added revenues (annualized) of $100 million.
Zacks Rank, Price Performance and Earnings Estimate Trend
With a market capitalization of $11.1 billion, SiteOne Landscape currently carries a Zacks Rank #2 (Buy). The company is poised to benefit from solid product offerings, acquired assets, growth investments, and solid operational and commercial execution. Rising products costs, product shortages, and trucking issues might be concerning.
In the past three months, SiteOne Landscape’s shares have gained 30.4% compared with the industry’s growth of 1.9%.
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The Zacks Consensus Estimate for SiteOne Landscape’s earnings is pegged at $4.87 for 2021 and $5.17 for 2022, reflecting increases of 13.8% and 13.4% from the respective 30-day-ago figures. Earnings estimates for the fourth quarter of 2021 are up 50% at 27 cents per share.
SiteOne Landscape Supply, Inc. Price and Consensus
SiteOne Landscape Supply, Inc. price-consensus-chart | SiteOne Landscape Supply, Inc. Quote
Other Stocks to Consider
Three other top-ranked stocks in the Zacks Industrial Products sector, which are actively engaged in buyout activities, are discussed below.
Helios Technologies, Inc. HLIO acquired China-based Shenzhen Joyonway Electronics & Technology Co., Ltd.’s electronic control systems and parts business in October 2021. Italy-based NEM S.r.l was purchased by Helios in July 2021, while it bought BJN Technologies, LLC in January 2021. HLIO presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Helios’ shares have gained 31.8% in the past three months. The Zacks Consensus Estimate for earnings increased 7.9% for 2021 and 9.8% for 2022 in the past 30 days.
A. O. Smith Corporation AOS enhanced its commercial and water heater offerings by acquiring Canada-based Giant Factories, Inc. in October 2021. It purchased Master Water Conditioning Corporation in July. AOS presently carries a Zacks Rank #2.
In the past three months, AOS’ shares have gained 15.3%. Also, the Zacks Consensus Estimate for A. O. Smith’s earnings has increased 6.6% for 2021 and 9.3% for 2022 in the past 30 days.
Applied Industrial Technologies, Inc. AIT acquired Gibson in January 2021 and R.R. Floody in August 2021. The R.R. Floody buyout has been strengthening its offerings in the automation technology space and boosting its reach across the U.S. Midwest market. AIT presently carries a Zacks Rank #2.
Shares of Applied Industrial have gained 17.3% in the past three months. The Zacks Consensus Estimate for AIT’s earnings has increased 1.9% for fiscal 2022 (ending June 2022) and 2.2% for fiscal 2023 (ending June 2023) in the past month.
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