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UFP Industries (UFPI) Buys Shelter Products, Expands in Alabama

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UFP Distribution, LLC, which is part of UFP Industries, Inc. (UFPI - Free Report) , has acquired the operating assets of Haleyville, AL-based Shelter Products, Inc. for $6.5 million. UFP Distribution — a wholly-owned subsidiary of UFP Construction, LLC — provides distribution and logistics support to factory-built manufacturers through nine warehouses across the United States.

Shelter Products’ 87,800 sq.-ft. warehouse provides distribution and logistics support to manufactured housing industry customers. Its close proximity to a UFP manufacturing facility, which supplies trusses to manufactured housing builders, will enable additional operational synergies. In 2020, Shelter Products had total sales of $11.4 million.

Patrick Benton, president of UFP Construction, said, “We continue to believe the lack of affordable housing will create greater demand for factory-built housing, and Shelter Products will help us meet this demand and offer opportunities to distribute new products in the southern U.S.”

Acquisitions Drive Growth

Acquisitions have been a preferred mode of solidifying UFP Industries' product portfolio and leveraging new business opportunities. On Apr 29, the company announced that one of its subsidiaries has acquired Minneapolis, MN-based Endurable Building Products, LLC. Endurable is a leading manufacturer of customized structural aluminum systems and products for exterior purposes like deck framing, balconies, sunshades, railings as well as stairs.

Again on Apr 19, 2021, the company acquired Walnut Hollow Farm, which produces a variety of finely finished wood surfaces used in hobby, craft, and woodworking projects as well as taxidermy. Additionally, Sunbelt Forest Products completed the acquisition of Spartanburg Forest Products and its affiliates on Apr 12, 2021. Both the buyouts will expand UFP Retail Solutions’ customer base and product offerings. In January, the company completed the acquisitions of PalletOne and SunBelt, which will provide it with a platform to add new products and services as well as create a new customer base. In second-quarter 2021, acquisitions added 36% to total sales growth.

Zacks Investment ResearchImage Source: Zacks Investment Research

UFP Industries shares have gained 26.9% year to date compared with the Zacks Building Products – Wood industry’s 23.3% rally. Also, earnings estimates for 2021 have remained stable at $7.33 per share over the past 60 days, indicating 83.3% year-over-year growth. UFP Industries, which shares space with Weyerhaeuser Company (WY - Free Report) in the same industry, is benefiting from a solid U.S. residential market and high demand for repair and remodeling activities. Also, buyout gains and shareholders' rewards will work in its favor.

Zacks Rank & Key Picks

UFP Industries 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 in the same space include Boise Cascade Company (BCC - Free Report) and Rayonier Inc. (RYN - Free Report) .

Boise Cascade — a Zacks #1 Rank company — is likely to witness 153.5% earnings growth in 2021.

Rayonier, a Zacks Rank #2 (Buy) stock, is expected to witness 104% growth in 2021 earnings.