4 Construction Picks To Beat Q2 Earnings On Builder Optimism

For investors seeking to apply this strategy to their portfolio, we have highlighted four construction stocks that may stand out this season.

KBR, Inc. (KBR - Analyst Report)

Based in Houston, TX, this Zacks Rank #1 engineering, construction, and services company currently has an earnings ESP of +32.14%. The company delivered a massive positive earnings surprise of 120% in the first quarter of 2015 – a sharp turnaround from three negative surprises in the preceding quarters. The Zacks Consensus Estimate for second-quarter 2015 earnings is pegged at 28 cents. The company will report its second-quarter results on Aug 4, before the commencement of trading.

Owens Corning (OC - Snapshot Report)

Based in  Toledo, OH, this Zacks Rank #1 building materials company has an earnings ESP of +1.89%. Owens Corning has become a market-leading innovator of glass-fiber technology. The Zacks Consensus Estimate for second-quarter 2015 earnings stands at 53 cents. The company has delivered positive earnings surprises in three of the last four quarters, with an average beat of 16.23%. The company is scheduled to report second quarter results on Jul 22, before market opens.

Summit Materials, Inc. (SUM - Snapshot Report

Based in Denver, CO, this Zacks Rank #3 heavy-side construction materials stock has an earnings ESP of +9.38%. Founded in 2009, the company went public in March this year. In its first quarterly result since going public – announced in May - the company delivered a positive earnings surprise of 85.45%. The Zacks Consensus Estimate for second-quarter earnings is 32 cents. The company should report sometime early next month.

Ryland Group Inc. (RYL - Snapshot Report

Based in California, this Zacks Rank #3 homebuilder has an earnings ESP of +9.59%. The Zacks Consensus Estimate for second-quarter earnings is 73 cents. The company is scheduled to report on Jul 30, before the market opens.

Conclusion

Though there are headwinds in the form of intense competition and cost inflation amid moderating home prices, there are plenty of reasons to be positive about the homebuilding sector over the short and the long term. The improving economy and swelling consumer confidence have fuelled the desire for new homes. And if homebuilding gets a boost can the broader construction sector be left far behind? A close look at the space for some outperformers, backed by a solid Zacks Rank and a positive Zacks Earnings ESP, could be a great idea for investors to tap the optimism in the sector.

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