Top construction product stocks to buy in 2022

New buildings are springing up everywhere. Homeowners, businesses and governments are investing heavily in new construction projects. As construction activity increases, investors can capitalize on various stocks that support the building materials sector. These stocks may provide an opportunity for growth as construction spending accelerates. Whether you are planning to build the house of your dreams or simply renovate the old one, you will need various products to complete the project inexpensively. From roofing materials to wall cladding, there are many products you’ll need for almost any home improvement project. In this article, we’ll take a look at some of the top building products stocks investors should watch in 2022 and beyond.

Gibraltar Industries (ROCK)

Gibraltar Industries, Inc. (ROCK) provides engineered building materials for residential and commercial construction. The Company’s products include roofing, siding, insulation, windows and other building products. It serves the residential, commercial and government construction segments. The Company’s products are primarily manufactured and sold under the CertainTeed, James Hardie and Franklin brand names. Gibraltar Industries, Inc. has a market capitalization of $5.14 billion; its shares were trading at approximately $69.63 as of May 21, 2019. The company has a dividend yield of 2.94% and a profit margin of 1.24%. Gibraltar activity should benefit from an improving economy, which will help boost residential and commercial construction activity. Additionally, the company has a top notch addition, and its position in the siding and window market should allow it to outperform the industry in the coming years. Gibraltar products are used in residential and commercial construction, with an emphasis on the high end of the market. This approach allows the company to charge a higher price for its products, which should help generate strong earnings growth over the next few years.

Masco (MAS)

Masco Corporation (MAS) is a manufacturer and marketer of various home improvement products including roofing, siding, windows and storage solutions. The company markets its products through a network of independent entrepreneurs. Masco Corporation has a market capitalization of $6.78 billion; its shares were trading at approximately $54.61 as of May 21, 2019. The company has a dividend yield of 3.19% and a profit margin of 8.09%. The housing market should remain robust over the next few years, as rising interest rates are unlikely to have a significant impact on home ownership. This should support strong growth in the home improvement sector over the next few years. In addition, Masco holds a leading position in the roofing, cladding and window market. This is a positive for the business, as homeowners will likely remain focused on the best brands when shopping for building products. With the housing market expected to remain strong, demand for Masco’s products is expected to increase, which should lead to strong earnings growth.

FirstSource Builders (BLDR)

Builders FirstSource, Inc. (BLDR) is engaged in the distribution of building materials. The company offers a wide range of construction materials, such as lumber; joinery, including windows, doors and beams; Material; siding and roofing products; prefabricated walls; and electrical and plumbing products. It also provides various related products and services, such as engineering and design, logistics and distribution, and marketing and sales. Builders FirstSource, Inc. has a market capitalization of $2.02 billion; its shares were trading at around $32.74 as of May 21, 2019. The company has a dividend yield of 1.80% and a profit margin of 7.95%. The residential construction segment is expected to remain strong shortly, supporting strong growth in the building materials industry. Builders FirstSource is an integrated distributor of building materials for residential and commercial construction. The company has a wide selection of products focused on the high end of the building materials market. This approach allows the company to charge a higher price for its products, which should help generate strong earnings growth over the next few years.

Allegation (ALLE)

Allegion PE provides security and locking solutions for the commercial and residential markets. The company offers products in the areas of access control, locking systems, cash management, intrusion detection, security alarms, and identity theft and fraud prevention. Allegion PE has a market cap of $16.83 billion; its shares were trading at around $68.19 as of May 21, 2019. The company has a dividend yield of 2.62% and a profit margin of 9.19%. The safety and security segment is likely to benefit from rising construction activity over the next few years, which is expected to support strong growth in the industry.

Additionally, Allegion holds a market-leading position in cash handling and security alarms, which is expected to help the company outperform the industry in the coming years. Additionally, the company offers identity theft and fraud prevention solutions, which are expected to expand as online commerce grows. Therefore, it is over-expanding to generate strong earnings growth in the coming years as construction activity increases and demand for its products grows.

Conclusion

US construction booming Construction spending is expected to grow at an annualized rate of 5.5% through 2022, according to the latest data compiled by the US Bureau of Economic Analysis (BEA). This growth is stimulated by several factors, including rising interest rates, a strong economy and increased investment in infrastructure. Investors looking to profit from this sector should keep an eye on stocks in the building products industry. Building products companies produce materials and equipment to construct residential, commercial and industrial buildings. They include asphalt and paving materials, bricks and masonry, millwork and roofing products, doors and windows, and electrical supplies. These companies rely heavily on residential construction and commercial real estate activity. These stocks are best for long-term investors who can hold the stocks through the ups and downs of the business cycle. Remember that construction stocks are among the most volatile and can experience large price swings from quarter to quarter.

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