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3 Building Products Stocks to Buy for EPS GROWTH

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President Biden’s historic $1.2 trillion infrastructure bill and healthy backlog for other construction-related activities including spec homes for homebuilders has continued to benefit many building products companies.

To that point, the Zacks Construction sector is currently ranked second out of 16 Zacks sectors and several building products stocks currently hold spots on the coveted Zacks Rank #1 (Strong Buy) list.

Standing out in terms of their increased probability here are three of these highly ranked building products stocks to consider at the moment.

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EMCOR Group (EME - Free Report)

EMCOR Group’s robust bottom line should certainly get investors' attention with its Zacks Building Products-Heavy Construction Industry currently in the top 37% of over 250 Zacks industries. In addition to its Zacks Rank #1 (Strong Buy), EMCOR has an “A” Zacks Style Scores grade for Growth.   

The mechanical and electrical construction provider has a leading niche in the space with its reach extending to industrial and energy infrastructure along with building services for a variety of businesses. EMCOR’s annual earnings are expected to rise 9% in fiscal 2024 and jump another 8% in FY25 to $15.75 per share. More impressive, FY25 EPS projections would represent 123% growth over the last five years with EMCOR’s earnings at $7.06 a share in 2021.

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Plus, over the last 30 days, FY24 and FY25 EPS estimates have soared 15% and 30% respectively with EMCOR’s fourth quarter earnings of $4.47 per share exceeding the Zacks Consensus of $3.51 a share by 27% last month.

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The Top Rated Building Products-Miscellaneous Industry

Notably, the Zacks Building Products-Miscellaneous Industry is in the top 3% of all Zacks industries with Knife River Corporation (KNF - Free Report)  and Advanced Drainage Systems (WMS - Free Report)  both receiving a strong buy rating among the space and having an “A” Zacks Style Scores grade for Growth as well.

Performing integrated contract services, Knife River is benefitting as a producer and marketer of aggregates or raw construction materials. Most intriguing, FY24 EPS estimates have risen 5% in the last 60 days with Knife River’s earnings now projected to rise 8% this year to $3.50 per share. Furthermore, while FY25 EPS estimates have remained unchanged over the last two months Knife River’s bottom line is expected to expand another 10% next year to $3.85 per share.

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As for Advanced Drainage Systems, the manufacturer of thermoplastic corrugate pipe provides a comprehensive suite of water management products and drainage solutions for use in the construction and infrastructure marketplace.

Earnings estimate revisions for Advanced Drainage Systems' FY24 and FY25 have risen over 9% in the last 60 days. Advanced Drainage Systems’ annual earnings are currently projected to be up 2% this year and forecasted to jump another 12% in FY25 to $6.95 per share.  

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Bottom Line

The EPS growth of these highly ranked building products stocks remains compelling with positive earnings estimate revisions alluding to the notion that it's an ideal time to buy. More importantly, increased infrastructure activities and a resilient market for homebuilders are starting to make EMCOR Group, Knife River, and Advanced Drainage Systems’ stock viable investments for 2024 and beyond.


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Advanced Drainage Systems, Inc. (WMS) - free report >>

EMCOR Group, Inc. (EME) - free report >>

Knife River Corporation (KNF) - free report >>

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