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Griffon Corporation GFF stands to benefit from strength across its businesses, focus on operational excellence and shareholder-friendly policies. The company remains focused on investing in growth opportunities and strengthening its long-term market position.
GFF, which has a market capitalization of nearly $3.4 billion, currently sports a Zacks Rank #1 (Strong Buy). Let’s delve into the factors that have been aiding the firm for a while now.
End-Market Strength: Griffon is witnessing strong momentum in the Home and Building Products segment. Increased demand for residential products, supported by the resiliency of repair and remodeling activities in the residential construction market, is supporting the segment’s results (revenues were flat on a year-over-year basis in the first quarter of fiscal 2025). The U.S. residential construction market is seeing a recovery in single-family housing, supported by lower interest rates and builder incentives, which is likely to be beneficial for the segment in the quarters ahead.
Acquisition Benefits: The company acquired an Australia-based company Pope, which is a provider of residential watering products. Pope has expanded its product portfolio in the Australian market. The acquisition of Pope is anticipated to generate annual revenues of around $25 million and positively impact the company's earnings in the first full year of ownership. In January 2022, GFF also acquired Hunter, a provider of residential ceiling, commercial and industrial fans. The buyout expanded its portfolio of consumer products.
Growth Investments: Griffon remains focused on investing in productivity, innovation and capacity expansion to drive growth. The company expanded Clopay's Troy manufacturing facility, which improved its manufacturing efficiencies and helped it to introduce new product lines. GFF also expanded its sectional door manufacturing capacity in Ohio to cater to the increasing demand for its premium products. Griffon plans to make additional investments in capacity expansion and technology in 2025.
GFF’s Price Performance
Image Source: Zacks Investment Research
In the past six months, the company’s shares have gained 4.3% against the industry’s 1.1% decline.
Pro-Investor Policies: GFF is committed to increasing shareholders’ wealth through share repurchases and dividend payouts. For instance, in the first quarter of fiscal 2025 (ended December 2024), it paid dividends worth $9 million and repurchased shares for $42.3 million. In November 2024, the company hiked its quarterly dividend by 20%. Also, in November 2024, Griffon’s board of directors approved an additional $400,000 share repurchase authorization.