For those looking to find strong Construction stocks, it is prudent to search for companies in the group that are outperforming their peers. Simpson Manufacturing (SSD) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Construction peers, we might be able to answer that question.
Simpson Manufacturing is a member of the Construction sector. This group includes 88 individual stocks and currently holds a Zacks Sector Rank of #14. The Zacks Sector Rank gauges the strength of our 16 individual sector groups by measuring the average Zacks Rank of the individual stocks within the groups.
The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. Simpson Manufacturing is currently sporting a Zacks Rank of #2 (Buy).
Within the past quarter, the Zacks Consensus Estimate for SSD's full-year earnings has moved 1.5% higher. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.
Our latest available data shows that SSD has returned about 13.6% since the start of the calendar year. In comparison, Construction companies have returned an average of 7.4%. As we can see, Simpson Manufacturing is performing better than its sector in the calendar year.
One other Construction stock that has outperformed the sector so far this year is Emcor Group (EME). The stock is up 33.3% year-to-date.
Over the past three months, Emcor Group's consensus EPS estimate for the current year has increased 6%. The stock currently has a Zacks Rank #2 (Buy).
Looking more specifically, Simpson Manufacturing belongs to the Building Products - Miscellaneous industry, which includes 30 individual stocks and currently sits at #96 in the Zacks Industry Rank. This group has gained an average of 6.7% so far this year, so SSD is performing better in this area.
Emcor Group, however, belongs to the Building Products - Heavy Construction industry. Currently, this 9-stock industry is ranked #1. The industry has moved +27.4% so far this year.
Going forward, investors interested in Construction stocks should continue to pay close attention to Simpson Manufacturing and Emcor Group as they could maintain their solid performance.
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Simpson Manufacturing Company, Inc. (SSD): Free Stock Analysis Report EMCOR Group, Inc. (EME): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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