Griffon Stock Exhibits Strong Prospects Despite Persisting Headwinds

Griffon Corporation GFF is witnessing strong momentum in the Home and Building Products (HBP) segment. Solid demand in the residential market, supported by the resiliency of repair and remodeling activity in the residential construction sector, is aiding the segment’s results. Maturing Millennial and Gen Z populations are driving household formation, which is likely to be beneficial for the segment. The recovery in the commercial construction market, driven by several projects undertaken by customers, also augurs well. The segment’s revenues increased 2% on a year-over-year basis in the third quarter of fiscal 2025 (ended June 2025).

Griffon solidified its product portfolio and leveraged business opportunities through asset additions. In July 2024, the company acquired an Australia-based company, Pope through its subsidiary, The AMES Companies, Inc. (AMES). Pope, which has been added to Griffon’s Consumer and Professional Products (CPP) segment, expanded its product portfolio in the Australian market. In the fiscal third quarter, the Pope acquisition contributed 1% to the CPP segment’s revenues. Griffon acquired Hunter, a provider of residential ceiling, commercial and industrial fans, in January 2022. Hunter, which has been integrated into the CPP segment, has expanded its portfolio of consumer products.

Griffon is committed to rewarding its shareholders handsomely through dividend payments and share buybacks. In the first nine months of fiscal 2025, it paid dividends worth $31.6 million and repurchased shares for $113 million. In fiscal 2024, the company rewarded its shareholders with $35.8 million in dividends and $309.9 million in buybacks. In November 2024, Griffon announced that the board of directors approved a new $400,000 share repurchase authorization. Also, in November 2024, the company hiked its quarterly dividend by 20%.

GFF’s Price Performance

In the year-to-date period, this Zacks Rank #3 (Hold) company’s shares have gained 9% compared with the industry’s 4.3% increase.

However, softness in the CPP segment raises concerns for Griffon. Reduced consumer demand across most regions, except Australia, has been weighing on its performance. Increased tariffs imposed by the U.S. administration have disrupted customer orders, which is troubling for the segment. Demand for products in the Hunter Fan business has been particularly weak. The CPP segment’s revenues declined 16% year over year in the third quarter of fiscal 2025.

Griffon operates across diverse regions (the United States, Europe, Canada and Australia), which exposes it to certain political, environmental and geopolitical issues. Moreover, it remains vulnerable to currency translation risks, which may affect its performance in the quarters ahead. A stronger U.S. dollar may depress the company's overseas business results in the near term. In the first nine months of fiscal 2025, forex woes had an adverse impact of 1% on the CPP segment’s revenues.

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