Armstrong World Industries, Inc. ( AWI Quick Quote AWI - Free Report) has been benefiting from investment in new products as well as inorganic growth. Also, the company is focused on its digitization initiative. So far this year, shares of Armstrong World have gained 39.6% compared with the Zacks Building Products – Miscellaneous industry’s 15.8% rise. The outperformance can primarily be attributable to a solid earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in the seven out of the trailing 10 quarters. Earnings estimates for 2021 have moved up 11.6% over the past 60 days. This positive trend signifies bullish analysts’ sentiments and justifies the company’s Zacks Rank #1 (Strong Buy), indicating robust fundamentals and the expectation of outperformance in the near term. You can see . the complete list of today’s Zacks #1 Rank stocks here Image Source: Zacks Investment Research Factors Driving Growth Investments in New Products Armstrong World — which shares space with Owens Corning ( OC Quick Quote OC - Free Report) , TopBuild Corp. ( BLD Quick Quote BLD - Free Report) and United Rentals, Inc. ( URI Quick Quote URI - Free Report) in the same industry — has been strategically investing in new products, sales and support services since its separation from the flooring business in 2016. It launched 35 products in 2020, reflecting a 50% increase from its normal pace of activity. In November 2020, it launched the AirAssure family of ceiling tiles. AirAssure is designed to reduce air leaks through the ceiling plane by up to four times over standard ceilings. Also last November, the company paired the patented Vidashield ultraviolet air purification system with Armstrong ceiling panels to provide cleaner and safer air in pretty much any commercial space. Furthermore, the company stated that there are other innovative products in the pipeline that are going to be added to the 24/7 Defend family in the near term. Acquisitions Boosting Product Offerings Armstrong World’s growth strategy is largely dependent on acquisitions that expand access to additional markets. The company follows a systematic strategy for portfolio diversification. In December 2020, Armstrong World acquired Arktura, LLC, a designer and fabricator of ceilings, walls, partitions and facades. On Aug 24, 2020, the company announced the acquisition of Moz Designs, Inc., a Northern California-based designer and fabricator of custom architectural metal ceilings, walls, dividers and column covers for interior and exterior applications. On Jun 28, 2020, Armstrong World announced the acquisition of Turf Design, Inc., a Chicago, IL-based commercial interiors design house and maker of custom felt ceiling as well as wall solutions. For the first and second quarter of 2021, all these businesses drove Architectural Specialties’ net sales by 24% and 23.6%, respectively. Digital Investments Bode Well Armstrong World has remained focused on its digitalization initiative. During 2020, the company introduced a new digital platform, Kanopi. Utilizing artificial intelligence and machine learning, Kanopi provides early access and enhanced visibility to a large part of the market that the company was previously unable to track efficiently. The Projectworks and Kanopi are unparalleled digital platforms in the ceiling space that provide access and solutions to opportunities that were previously unreachable. Superior ROE Armstrong World’s superior return on equity (ROE) is also indicative of growth potential. The company’s ROE currently stands at 39.6%. This compares favorably with ROE of 10.3% for the industry it belongs to. This indicates efficiency in using its shareholders’ funds and Armstrong World’s ability to generate profit with minimum capital usage.