Home Construction Materials Stocks: A Comparison of Quanex, Simpson, Masco, Builders FirstSource, and Owens Corning in Q1 2023
As the end of the earnings season approaches, it's a good time to take a step back and assess which companies shone and which ones struggled. Let's take a look at how home construction materials stocks performed in Q1, starting with Quanex (NYSE:NX). Traditionally, home construction materials companies have built their economic moats through expertise in specialized areas, brand recognition, and strong relationships with contractors. More recently, advancements in addressing labor availability and job site productivity have spurred innovation, driving incremental demand. However, these companies are at the mercy of residential construction volumes, which tend to be cyclical and can be heavily impacted by economic factors such as interest rates. Additionally, the costs of raw materials can be influenced by a myriad of worldwide factors and greatly impact the profitability of home construction materials companies. The 12 home construction materials stocks we track reported a satisfactory Q1. As a group, revenues were in line with analysts' consensus estimates. In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results. Quanex, starting in the seamless tube industry, manufactures building products like window, door, kitchen, and bath cabinet components. The company reported revenues of $452.5 million, up 70% year on year. This print exceeded analysts' expectations by 3.2%. Overall, it was an exceptional quarter for the company with an impressive beat of analysts' EPS estimates and a solid beat of analysts' adjusted operating income estimates. The stock is up 20.2% since reporting and currently trades at $20.56.
Simpson (NYSE:SSD) Aiming to build safer and stronger buildings, Simpson designs and manufactures structural connectors, anchors, and other construction products. The company reported revenues of $538.9 million, up 1.6% year on year, outperforming analysts' expectations by 2%. The business had an exceptional quarter with a solid beat of analysts' EBITDA estimates and an impressive beat of analysts' EPS estimates. The stock is up 2.2% since reporting and currently trades at $156.83.
Masco (NYSE:MAS) Headquartered just outside of Detroit, MI, Masco designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets. The company reported revenues of $1.80 billion, down 6.5% year on year, falling short of analysts' expectations by 2%. It was a disappointing quarter as it posted a significant miss of analysts' adjusted operating income estimates. Interestingly, the stock is up 4.1% since the results and currently trades at $63.83.
Builders FirstSource (NYSE:BLDR) Headquartered in Irving, TX, Builders FirstSource is a construction materials manufacturer that offers a variety of lumber and lumber-related building products. The company reported revenues of $3.66 billion, down 6% year on year. This number was in line with analysts' expectations. However, it recorded a miss of analysts' Windows, doors & millwork revenue estimates and full-year EBITDA guidance missing analysts' expectations significantly. Builders FirstSource had the weakest full-year guidance update among its peers. The stock is down 4% since reporting and currently trades at $114.55.
Owens Corning (NYSE:OC) Credited with the discovery of fiberglass, Owens Corning supplies building and construction materials to the United States and international markets. The company reported revenues of $2.53 billion, up 25.4% year on year. This print beat analysts' expectations by 0.7%. However, it logged a significant miss of analysts' organic revenue estimates. The stock is down 2.6% since reporting and currently trades at $138
