Griffon Gains From Business Strength & Buyouts Amid Headwinds

Griffon Corporation GFF is benefiting from solid demand in the residential market, supported by the resiliency of repair and remodeling activity in the residential construction sector. The recovery in the commercial construction market, driven by several projects undertaken by customers, also augurs well for the company.Griffon has been strengthening its business through acquisitions. In July 2024, it acquired an Australia-based company, Pope (a provider of residential watering products), through its subsidiary, The AMES Companies. Pope, which has been added to Griffon’s Consumer and Professional Products (CPP) segment, expanded its product portfolio in the Australian market. In the third-quarter fiscal 2025 (ended June 2025), the Pope acquisition contributed 1% to the CPP segment’s revenues.Also, in January 2022, Griffon acquired Hunter, a provider of residential ceiling, commercial and industrial fans. Hunter, which has been integrated into the CPP segment, expanded its portfolio of consumer products.GFF is committed to rewarding its shareholders handsomely through dividend payments and share buybacks. For instance. in the first nine months of fiscal 2025, it paid dividends worth $31.6 million and repurchased shares for $113 million. Also, in fiscal 2024 (ended September 2024), the company rewarded its shareholders with $35.8 million in dividends and $309.9 million in buybacks. Also, in November 2024, the company hiked its quarterly dividend by 20%.Few Near-Term HeadwindsDespite the positives, Griffon has been grappling with persistent weakness in the CPP segment. Reduced consumer demand across most regions, except Australia, has been weighing on the segment’s performance. 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.GFF’s highly leveraged balance sheet is an added concern. It exited the fiscal third quarter with a long-term debt of $1.44 billion. Its current liabilities were at $338 million, higher than the cash equivalents of $107.3 million. This implies that the company does not have sufficient cash to meet its short-term debt obligations.Griffon, which belongs to the Zacks Diversified Operations industry, faces stiff competition from several peers including 3M Company MMM, Carlisle Companies Incorporated CSL and Builders FirstSource, Inc. BLDR.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report 3M Company (MMM): Free Stock Analysis Report Builders FirstSource, Inc. (BLDR): Free Stock Analysis Report Carlisle Companies Incorporated (CSL): Free Stock Analysis Report Griffon Corporation (GFF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks