Installed Building (IBP) Rides on Surface Purveyors' Buyout
Installed Building Products, Inc.’s IBP shares rose 2.6% in the after-hour trading session on Nov 14, after it announced the acquisition of Surface Purveyors, LLC.
Working as Lynch Insulation, Surface Purveyors primarily installs fiberglass and spray foam insulation into multifamily, residential and commercial projects in Montana.
Jeff Edwards, chairman and chief executive officer of IBP, stated, “With approximately $5 million of annual revenue, Lynch expands our presence in Montana. To date in 2022, we have acquired approximately $78 million of annual revenue. Acquisitions remain a key component of our growth strategy and we continue to have a robust pipeline of opportunities across multiple geographies, products, and end markets.”
IBP’s Acquisition Drive
Acquisitions have been a preferred mode of expansion for IBP for years. The company’s persistent focus on prioritizing profitable growth through acquiring well-run installers of insulation and complementary building products bodes well.
In September, IBP acquired a Longwood, FL-based installer of spray foam and fiberglass insulation — All Florida Insulation, LLC — with annual revenue of approximately $2.4 million.
In May, it acquired Statewide Insulation, Inc. (known as Tri-County Insulation and Acoustical Contractors), an installer of fiberglass insulation, spray foam insulation, and acoustical ceiling insulation into new residential, multifamily, and commercial projects in California.
In 2021, the company wrapped up 12 acquisitions, representing approximately $211 million of annual revenues, more than doubling IBP’s $100 million acquired revenue target for 2021. In 2022, IBP expects to generate at least $100 million in revenues. So far, in 2022, the company has acquired approximately $54 million of annual revenues.
Share Price Performance
Shares of this Zacks Rank #3 (Hold) firm have lost 23.4% in the past three months compared with the Zacks Building Products – Miscellaneous industry’s 9.6% decline. IBP has been facing the heat of inflationary pressure and supply chain issues like other industry players. Also, slowness in the housing industry is likely to have impacted its growth.
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Nonetheless, the solid acquisition strategy is certainly poised to add growth.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here..
Some Better-Ranked Stocks in the Same Space
Better ranked stocked in the same industry are Janus International Group, Inc. JBI, Williams Industrial Services Group Inc. WLMS and United Rentals, Inc. URI, each carrying a Zacks Rank #2 (Buy).
Headquartered in Temple, GA, Janus manufactures and supplies turn-key self-storage and commercial and industrial building solutions. Solid backlog level, impressive project pipeline, productivity improvements and commercial actions, including pricing, are expected to drive growth. The company is expected to benefit from its one-stop-shop offering with a leading market share position in self-storage doors and related design and installation services.
Janus’ earnings for 2022 are expected to rise 21%.
United Rentals is the largest equipment rental company in the world, with an integrated network of 1,390 rental locations in the United States, Canada and Europe. URI operates in 49 states and every Canadian province. United Rentals offers 4,500 classes of equipment for rent at a total original equipment cost of $17.43 billion (as of September 2022).
United Rentals’ expected earnings growth for the current year is 46.9%.
Williams Industrial Services is a provider of construction, maintenance, and support services to energy, power, and industrial end markets in the United States and Canada.
Although Williams Industrial Services’ earnings for 2022 are expected to fall by 170%, it is expected to post stellar earnings growth of 385.7% in 2023.
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