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TopBuild (BLD) Buys Valley Gutter, Fortifies Service Partner
TopBuild Corp. (BLD - Free Report) has acquired a fabricator and distributor of gutter products and specialty metals, Valley Gutter Supply, for an undisclosed amount. This addition helped the company to strengthen Service Partner’s gutter fabrication and distribution capacity throughout the state of California.
Valley Gutter — which generated trailing 12-month revenues of $10 million (on Jun 30, 2021) — serves customers primarily for the residential market. Markedly, 70% of Valley Gutter’s customers serve the residential market, with the balance serving light commercial.
Acquisitions: A Strong Growth Driver
TopBuild has a penchant for acquisitions and strategic alliances for bolstering inorganic growth as well as expanding market share. So far this year, TopBuild has wrapped up six acquisitions, which are expected to generate approximately $230 million of annual revenues.
In June, the company completed the acquisition of RJ Insulation that is expected to generate $4 million in annual revenues. During first-quarter 2021, it acquired LCR Contractors and Ozark Foam, a residential and light commercial insulation company. Also, in April 2021, TopBuild closed American Building Systems Group of Companies and Creative Conservation acquisitions.
Image Source: Zacks Investment Research
TopBuild’s shares have increased 17.7% year to date compared with the Zacks Building Products – Miscellaneous industry’s 12.9% rally. The company has been benefiting from robust U.S. housing market fundamentals, higher sales volumes and systematic inorganic strategy. Also, earnings estimates for 2021 have moved 4.1% upward over the past 30 days, depicting analysts’ optimism regarding its bottom-line growth potential.
Zacks Rank & Key Picks
TopBuild currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks from the same industry include Armstrong World Industries, Inc. (AWI - Free Report) , Owens Corning Inc. (OC - Free Report) and Otis Worldwide Corporation (OTIS - Free Report) . While Armstrong World and Owens Corning currently sport a Zacks Rank #1, Otis carries a Zacks Rank #2 (Buy).
Earnings for Armstrong World, Owens Corning and Otis are expected to increase 16.3%, 68.1% and 17.9%, respectively, for 2021.