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Construction Partners (ROAD) Expands in SC, Buys Hubbard Paving
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Construction Partners, Inc. or CPI (ROAD - Free Report) has strengthened its presence in the dynamic Upstate region of South Carolina with the acquisition of Hubbard Paving & Grading, Inc. This strategic move bolsters CPI's subsidiary, King Asphalt, Inc., by adding a hot-mix asphalt plant and construction operations.
ROAD shares declined 0.7% during the trading session and 1.8% during the after-hour trading hours on Oct 2.
The Upstate area, known for its rapid growth, offers significant opportunities for infrastructure development. CPI's expanded capabilities will enable it to meet the growing demand for road construction and maintenance services in the greater Greenville metro area.
Acquisitions & Infrastructure Push: A Boon
Construction Partners has been bolstering inorganic growth and market expansion over the last few quarters. On Aug 1, 2023, the company acquired a hot-mix asphalt plant in Myrtle Beach, SC from C.R. Jackson, Inc. and established a new greenfield hot-mix asphalt plant and market in Waycross, GA. This buyout enhanced its presence in the fast-growing and dynamic Myrtle Beach-Conway metro area. CPI entered this market a year ago with the acquisition of Southern Asphalt. This transaction strengthened its footprint in the market and provided more resources for South Carolina coastal area operations.
On May 1, 2023, CPI acquired the Huntsville, AL operations of Southern Site Contractors, a reputable Tennessee-based firm specializing in excavation, grading, and utility contracting. This strategic move strengthened CPI's vertical integration of construction services and bolstered its presence in the thriving Huntsville, AL market.
Further, the latest Hubbard Paving acquisition aligns with CPI's commitment to becoming a leader in civil infrastructure across the Southeast. With a stronger foothold in South Carolina, CPI is poised for continued growth and success in the booming Upstate market.
Meanwhile, increased government infrastructure spending is bolstering the company’s prospects. The U.S. administration’s endeavor to rebuild the nation’s deteriorating roads and bridges and fund new climate-resilient and broadband initiatives is expected to aid the company.
Image Source: Zacks Investment Research
So far this year, ROAD has gained 36.1%, outperforming the Zacks Building Products - Miscellaneous industry’s 25.4% rise. Earnings per share (EPS) estimates for fiscal 2023 moved north in the past 60 days to 84 cents from 70 cents, reflecting analysts’ optimism for its growth potential. The estimated figure indicates 104.9% year-over-year growth for fiscal 2023. The same for fiscal 2024 reflects 38.4% year-over-year growth. Further, ROAD has a long-term earnings growth rate of 48.4%, making us confident in its inherent strength.
Shares of IBP have surged 43.6% year to date. The Zacks Consensus Estimate for IBP’s 2023 sales and EPS indicates gains of 4.7% and 8.6%, respectively, from the year-ago period’s levels.
TopBuild Corp. (BLD - Free Report) flaunts a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 14.1% on average. Shares of BLD have surged 58.5% this year.
The Zacks Consensus Estimate for BLD’s 2023 sales and EPS indicates gains of 3.3% and 8.4%, respectively, from the year-ago period’s levels.
Arcosa, Inc. (ACA - Free Report) currently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 47.5% on average. Shares of ACA have surged 29.4% this year.
The Zacks Consensus Estimate for ACA’s 2023 sales and EPS indicates gains of 1.2% and 32.9%, respectively, from the year-ago period’s levels.
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Construction Partners (ROAD) Expands in SC, Buys Hubbard Paving
Construction Partners, Inc. or CPI (ROAD - Free Report) has strengthened its presence in the dynamic Upstate region of South Carolina with the acquisition of Hubbard Paving & Grading, Inc. This strategic move bolsters CPI's subsidiary, King Asphalt, Inc., by adding a hot-mix asphalt plant and construction operations.
ROAD shares declined 0.7% during the trading session and 1.8% during the after-hour trading hours on Oct 2.
The Upstate area, known for its rapid growth, offers significant opportunities for infrastructure development. CPI's expanded capabilities will enable it to meet the growing demand for road construction and maintenance services in the greater Greenville metro area.
Acquisitions & Infrastructure Push: A Boon
Construction Partners has been bolstering inorganic growth and market expansion over the last few quarters. On Aug 1, 2023, the company acquired a hot-mix asphalt plant in Myrtle Beach, SC from C.R. Jackson, Inc. and established a new greenfield hot-mix asphalt plant and market in Waycross, GA. This buyout enhanced its presence in the fast-growing and dynamic Myrtle Beach-Conway metro area. CPI entered this market a year ago with the acquisition of Southern Asphalt. This transaction strengthened its footprint in the market and provided more resources for South Carolina coastal area operations.
On May 1, 2023, CPI acquired the Huntsville, AL operations of Southern Site Contractors, a reputable Tennessee-based firm specializing in excavation, grading, and utility contracting. This strategic move strengthened CPI's vertical integration of construction services and bolstered its presence in the thriving Huntsville, AL market.
Further, the latest Hubbard Paving acquisition aligns with CPI's commitment to becoming a leader in civil infrastructure across the Southeast. With a stronger foothold in South Carolina, CPI is poised for continued growth and success in the booming Upstate market.
Meanwhile, increased government infrastructure spending is bolstering the company’s prospects. The U.S. administration’s endeavor to rebuild the nation’s deteriorating roads and bridges and fund new climate-resilient and broadband initiatives is expected to aid the company.
Image Source: Zacks Investment Research
So far this year, ROAD has gained 36.1%, outperforming the Zacks Building Products - Miscellaneous industry’s 25.4% rise. Earnings per share (EPS) estimates for fiscal 2023 moved north in the past 60 days to 84 cents from 70 cents, reflecting analysts’ optimism for its growth potential. The estimated figure indicates 104.9% year-over-year growth for fiscal 2023. The same for fiscal 2024 reflects 38.4% year-over-year growth. Further, ROAD has a long-term earnings growth rate of 48.4%, making us confident in its inherent strength.
Zacks Rank & Stocks to Consider
Currently, CPI carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same space are:
Installed Building Products, Inc. (IBP - Free Report) currently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 5.5% on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of IBP have surged 43.6% year to date. The Zacks Consensus Estimate for IBP’s 2023 sales and EPS indicates gains of 4.7% and 8.6%, respectively, from the year-ago period’s levels.
TopBuild Corp. (BLD - Free Report) flaunts a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 14.1% on average. Shares of BLD have surged 58.5% this year.
The Zacks Consensus Estimate for BLD’s 2023 sales and EPS indicates gains of 3.3% and 8.4%, respectively, from the year-ago period’s levels.
Arcosa, Inc. (ACA - Free Report) currently carries a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 47.5% on average. Shares of ACA have surged 29.4% this year.
The Zacks Consensus Estimate for ACA’s 2023 sales and EPS indicates gains of 1.2% and 32.9%, respectively, from the year-ago period’s levels.