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Beacon Roofing (BECN) Completes Divesture of Solar Products
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Beacon Roofing Supply, Inc. (BECN - Free Report) inked a deal with a leading renewable energy developer, service supplier and systems provider — BayWa r.e. — for the sale of its Solar Products business. Beacon sold Solar Products to improve financial flexibility and focus on its core exteriors business.
The solar products business was part of the Allied Building Products acquisition, held in 2018. In fiscal 2021, the divested business generated net sales of approximately $111 million, net income of $2.6 million and adjusted EBITDA of $3.7 million.
With this divestiture, the company is committed to growing sales and profitability as well as pursuing strategic growth initiatives for its core exteriors business. The divestment will help Beacon return to its legacy position as a focused leader with exterior building products distribution. Notably, 80-85% of the company’s continuing business will be within residential and commercial roofing. Driven by the high concentration on non-discretionary repair and remodel demand, exteriors offer a unique platform for the company.
Beacon’s president and chief executive officer, Julian Francis, stated, "BayWa r.e. is one of the most respected brands in the clean energy business and uniquely situated to provide the best service for our solar customers and the best opportunities for Beacon Solar employees. We also look forward to developing cross-marketing and selling opportunities with BayWa r.e. to mutually benefit both companies in their respective markets."
Image Source: Zacks Investment Research
Beacon Roofing’s shares have underperformed the industry in the past year. Nonetheless, earnings estimates for the current year have been trending upward in the past seven days, depicting analysts’ optimism over the company’s growth prospect.
Recently, the company’s board decided to change its fiscal year end from Sep 30 to Dec 31 (effective from Jan 1, 2022) for the year ending Dec 31, 2022. It feels that the change will be extremely beneficial by promoting internal efficiencies and better external comparability.
Other Top-Ranked Stocks in the Building Products - Retail Industry
Builders FirstSource, Inc. (BLDR - Free Report) currently sports a Zacks Rank #1. This supplier of building materials has been gaining from its focus on cost synergies, strategic acquisitions and robust demand arising from solid housing activities. BLDR continues to focus on investing in innovations and enhancing digital solutions for customers.
Builders FirstSource’s shares have gained 72.1% year to date. Earnings are expected to rise 173.1% in 2021.
Tecnoglass Inc. (TGLS - Free Report) currently sports a Zacks Rank #1. The company is engaged in manufacturing and selling architectural glass and windows and aluminum products for the residential and commercial construction industries. TGLS operates primarily in North, Central and South America.
Tecnoglass’ shares have surged 340.1% year to date. Earnings for 2021 are expected to rise 84.8%.
The Home Depot, Inc. (HD - Free Report) is a leading home improvement specialty retailer, which offers a wide range of home-improvement items, building materials, lawn and garden products, décor products and related services. The company sports a Zacks Rank #1.
Home Depot’s shares have soared 53.9% year to date. Earnings are expected to grow 28.2% in fiscal 2021.
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Beacon Roofing (BECN) Completes Divesture of Solar Products
Beacon Roofing Supply, Inc. (BECN - Free Report) inked a deal with a leading renewable energy developer, service supplier and systems provider — BayWa r.e. — for the sale of its Solar Products business. Beacon sold Solar Products to improve financial flexibility and focus on its core exteriors business.
The solar products business was part of the Allied Building Products acquisition, held in 2018. In fiscal 2021, the divested business generated net sales of approximately $111 million, net income of $2.6 million and adjusted EBITDA of $3.7 million.
With this divestiture, the company is committed to growing sales and profitability as well as pursuing strategic growth initiatives for its core exteriors business. The divestment will help Beacon return to its legacy position as a focused leader with exterior building products distribution. Notably, 80-85% of the company’s continuing business will be within residential and commercial roofing. Driven by the high concentration on non-discretionary repair and remodel demand, exteriors offer a unique platform for the company.
Beacon’s president and chief executive officer, Julian Francis, stated, "BayWa r.e. is one of the most respected brands in the clean energy business and uniquely situated to provide the best service for our solar customers and the best opportunities for Beacon Solar employees. We also look forward to developing cross-marketing and selling opportunities with BayWa r.e. to mutually benefit both companies in their respective markets."
Beacon Roofing’s shares have underperformed the industry in the past year. Nonetheless, earnings estimates for the current year have been trending upward in the past seven days, depicting analysts’ optimism over the company’s growth prospect.
Recently, the company’s board decided to change its fiscal year end from Sep 30 to Dec 31 (effective from Jan 1, 2022) for the year ending Dec 31, 2022. It feels that the change will be extremely beneficial by promoting internal efficiencies and better external comparability.
Zacks Rank
Beacon Roofing currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Top-Ranked Stocks in the Building Products - Retail Industry
Builders FirstSource, Inc. (BLDR - Free Report) currently sports a Zacks Rank #1. This supplier of building materials has been gaining from its focus on cost synergies, strategic acquisitions and robust demand arising from solid housing activities. BLDR continues to focus on investing in innovations and enhancing digital solutions for customers.
Builders FirstSource’s shares have gained 72.1% year to date. Earnings are expected to rise 173.1% in 2021.
Tecnoglass Inc. (TGLS - Free Report) currently sports a Zacks Rank #1. The company is engaged in manufacturing and selling architectural glass and windows and aluminum products for the residential and commercial construction industries. TGLS operates primarily in North, Central and South America.
Tecnoglass’ shares have surged 340.1% year to date. Earnings for 2021 are expected to rise 84.8%.
The Home Depot, Inc. (HD - Free Report) is a leading home improvement specialty retailer, which offers a wide range of home-improvement items, building materials, lawn and garden products, décor products and related services. The company sports a Zacks Rank #1.
Home Depot’s shares have soared 53.9% year to date. Earnings are expected to grow 28.2% in fiscal 2021.