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Griffon vs. Carlisle: Which Industrial Conglomerate Stock has Greater Upside?
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Griffon Corporation (GFF - Free Report) and Carlisle Companies Incorporated (CSL - Free Report) are both familiar names operating in the Zacks Diversified Operations industry. As rivals, both companies are engaged in producing innovative home and building envelope products and solutions in the United States and internationally.
Both companies have been enjoying significant growth opportunities in the construction sector on account of several ongoing projects across both the residential and non-residential markets. But which one is a better investment today? Let’s take a closer look at their fundamentals, growth prospects and challenges to make an informed choice.
The Case for Griffon
Griffon is witnessing strong fundamentals in the Home and Building Products segment. Stable demand in the market, supported by the resiliency of repair and remodeling activity in the construction sector, is likely to drive the segment’s results in the quarters ahead. The U.S. residential construction market is expected to witness a recovery in single-family housing, supported by builder incentives and expected interest rate cuts later this year. Also, the recovery in the commercial construction market, driven by several projects undertaken by customers, is anticipated to benefit the segment moving ahead.
However, weakness in the Consumer and Professional Products (CPP) segment remains a concern for Griffon. Reduced consumer demand in North America and the United Kingdom has been weighing on the segment's performance, of late. Demand for products like outdoor tools, project tools and outdoor decor and watering products has been particularly weak.
Griffon has been strengthening its business through acquisitions. In July 2024, it acquired an Australia-based company, Pope (a provider of residential watering products), through its subsidiary, The AMES Companies, Inc. Pope, which has been added to Griffon’s CPP segment, has expanded its product portfolio in the Australian market. In second-quarter fiscal 2025 (ended March 2025), the Pope acquisition contributed 2% to the CPP segment’s revenues. This buyout is anticipated to generate annual revenues of around $25 million and positively impact the company's earnings in the first full year of ownership.
GFF remains committed to rewarding its shareholders handsomely through dividend payments and share buybacks. In the fiscal second quarter, it paid dividends worth $23.4 million and repurchased shares for $72.9 million. It’s worth noting that in November 2024, Griffon’s board approved a new $400,000 share repurchase authorization. Also, in the same month, the company hiked its quarterly dividend by 20%.
The Case for Carlisle
Carlisle is experiencing strong momentum in the Construction Materials segment, driven by robust demand for reroofing products. Higher sales in the non-residential construction market in the United States and Europe, driven by the acquisition of MTL and growing re-roof activity as a result of pent-up demand, have been driving the segment’s performance. In the quarters ahead, the company expects the non-residential construction market to continue benefiting as customers are undertaking several projects related to the replacement of older, existing roofs on non-residential structures.
However, lower volumes in the residential construction market and project delays are adversely affecting the Weatherproofing Technologies segment. The slowdown in the new housing, repair and remodel activities, due to high interest rates, unfavorable weather conditions and affordability challenges, has been affecting the segment’s performance.
CSL remains highly committed to adding to its shareholders’ wealth. For instance, in the first three months of 2025, it rewarded its shareholders with a dividend payment of $45.2 million and bought back shares worth $400 million. Also, in August 2024, it hiked its dividend by 18%.
It’s worth noting that Carlisle has been dealing with the increasing raw material and labor costs. Not only is this pushing up its direct expenses, but it is also raising selling, general and administrative expenses. While current revenue growth rates are supporting the rising cost, they are largely driven by channel inventory filling.
In the first quarter, Carlisle’s cost of sales increased 1.8% year over year, while its selling and administrative expenses increased 16.3%. Also, in 2024, its selling and administrative expenses and cost of sales increased 15.6% and 5.5%, respectively, year over year. Consequently, any slowdown in non-residential construction activity will be a big woe for the company.
How Does the Zacks Consensus Estimate Compare for GFF & CSL?
While the Zacks Consensus Estimate for GFF’s fiscal 2025 sales implies a year-over-year decline of 1.2%, the same for earnings per share (EPS) indicates growth of 11.5%. GFF’s EPS estimates have been trending northward over the past 60 days for fiscal 2025.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CSL’s 2025 sales and EPS implies year-over-year growth of 4.9% and 10.3%, respectively. The company’s EPS estimates for 2025 have declined over the past 60 days.
Image Source: Zacks Investment Research
Price Performance and Valuation of GFF & CSL
In the past year, Carlisle’s shares have lost 4.9%, while Griffon stock has gained 5.4%.
Image Source: Zacks Investment Research
Carlisle is trading at a forward 12-month price-to-earnings ratio of 17.15X, above its median of 14.84X over the last three years. Griffon’s forward earnings multiple sits at 11.41X, close to its median of 10.66X over the same time frame.
Carlisle’s strength in the Construction Materials segment has been dented by persistent weakness in its Weatherproofing Technologies unit due to lower demand in the residential market. Also, CSL’s expensive valuation and downward earnings estimate revisions warrant a cautious approach for existing investors.
In contrast, Griffon’s strength in the Home and Building Products segment, along with its growth investments, accretive acquisitions and shareholder-friendly policies, bodes well for strong growth in the quarters ahead. Additionally, GFF’s attractive valuation is more appealing and its upwardly revised earnings estimates instill confidence. Given these factors, GFF seems a better pick for investors than CSL currently.
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Griffon vs. Carlisle: Which Industrial Conglomerate Stock has Greater Upside?
Griffon Corporation (GFF - Free Report) and Carlisle Companies Incorporated (CSL - Free Report) are both familiar names operating in the Zacks Diversified Operations industry. As rivals, both companies are engaged in producing innovative home and building envelope products and solutions in the United States and internationally.
Both companies have been enjoying significant growth opportunities in the construction sector on account of several ongoing projects across both the residential and non-residential markets. But which one is a better investment today? Let’s take a closer look at their fundamentals, growth prospects and challenges to make an informed choice.
The Case for Griffon
Griffon is witnessing strong fundamentals in the Home and Building Products segment. Stable demand in the market, supported by the resiliency of repair and remodeling activity in the construction sector, is likely to drive the segment’s results in the quarters ahead. The U.S. residential construction market is expected to witness a recovery in single-family housing, supported by builder incentives and expected interest rate cuts later this year. Also, the recovery in the commercial construction market, driven by several projects undertaken by customers, is anticipated to benefit the segment moving ahead.
However, weakness in the Consumer and Professional Products (CPP) segment remains a concern for Griffon. Reduced consumer demand in North America and the United Kingdom has been weighing on the segment's performance, of late. Demand for products like outdoor tools, project tools and outdoor decor and watering products has been particularly weak.
Griffon has been strengthening its business through acquisitions. In July 2024, it acquired an Australia-based company, Pope (a provider of residential watering products), through its subsidiary, The AMES Companies, Inc. Pope, which has been added to Griffon’s CPP segment, has expanded its product portfolio in the Australian market. In second-quarter fiscal 2025 (ended March 2025), the Pope acquisition contributed 2% to the CPP segment’s revenues. This buyout is anticipated to generate annual revenues of around $25 million and positively impact the company's earnings in the first full year of ownership.
GFF remains committed to rewarding its shareholders handsomely through dividend payments and share buybacks. In the fiscal second quarter, it paid dividends worth $23.4 million and repurchased shares for $72.9 million. It’s worth noting that in November 2024, Griffon’s board approved a new $400,000 share repurchase authorization. Also, in the same month, the company hiked its quarterly dividend by 20%.
The Case for Carlisle
Carlisle is experiencing strong momentum in the Construction Materials segment, driven by robust demand for reroofing products. Higher sales in the non-residential construction market in the United States and Europe, driven by the acquisition of MTL and growing re-roof activity as a result of pent-up demand, have been driving the segment’s performance. In the quarters ahead, the company expects the non-residential construction market to continue benefiting as customers are undertaking several projects related to the replacement of older, existing roofs on non-residential structures.
However, lower volumes in the residential construction market and project delays are adversely affecting the Weatherproofing Technologies segment. The slowdown in the new housing, repair and remodel activities, due to high interest rates, unfavorable weather conditions and affordability challenges, has been affecting the segment’s performance.
CSL remains highly committed to adding to its shareholders’ wealth. For instance, in the first three months of 2025, it rewarded its shareholders with a dividend payment of $45.2 million and bought back shares worth $400 million. Also, in August 2024, it hiked its dividend by 18%.
It’s worth noting that Carlisle has been dealing with the increasing raw material and labor costs. Not only is this pushing up its direct expenses, but it is also raising selling, general and administrative expenses. While current revenue growth rates are supporting the rising cost, they are largely driven by channel inventory filling.
In the first quarter, Carlisle’s cost of sales increased 1.8% year over year, while its selling and administrative expenses increased 16.3%. Also, in 2024, its selling and administrative expenses and cost of sales increased 15.6% and 5.5%, respectively, year over year. Consequently, any slowdown in non-residential construction activity will be a big woe for the company.
How Does the Zacks Consensus Estimate Compare for GFF & CSL?
While the Zacks Consensus Estimate for GFF’s fiscal 2025 sales implies a year-over-year decline of 1.2%, the same for earnings per share (EPS) indicates growth of 11.5%. GFF’s EPS estimates have been trending northward over the past 60 days for fiscal 2025.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CSL’s 2025 sales and EPS implies year-over-year growth of 4.9% and 10.3%, respectively. The company’s EPS estimates for 2025 have declined over the past 60 days.
Image Source: Zacks Investment Research
Price Performance and Valuation of GFF & CSL
In the past year, Carlisle’s shares have lost 4.9%, while Griffon stock has gained 5.4%.
Image Source: Zacks Investment Research
Carlisle is trading at a forward 12-month price-to-earnings ratio of 17.15X, above its median of 14.84X over the last three years. Griffon’s forward earnings multiple sits at 11.41X, close to its median of 10.66X over the same time frame.
Image Source: Zacks Investment Research
Final Take
Griffon and Carlisle have a Zacks Rank #3 (Hold) each, which makes choosing one stock a difficult task. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Carlisle’s strength in the Construction Materials segment has been dented by persistent weakness in its Weatherproofing Technologies unit due to lower demand in the residential market. Also, CSL’s expensive valuation and downward earnings estimate revisions warrant a cautious approach for existing investors.
In contrast, Griffon’s strength in the Home and Building Products segment, along with its growth investments, accretive acquisitions and shareholder-friendly policies, bodes well for strong growth in the quarters ahead. Additionally, GFF’s attractive valuation is more appealing and its upwardly revised earnings estimates instill confidence. Given these factors, GFF seems a better pick for investors than CSL currently.