3 building materials shares creating wealth for investors

A buoyant housing sector is keeping these construction material stocks in the money as they hit 52-week highs.

A chronic shortage of affordable housing options across the country should help boost companies in the business of providing materials for residential construction projects, with hopes sweeteners for the sector may emerge from next month’s Federal Budget.

CSR Limited (ASX: CSR)

Big-name building materials manufacturer CSR Limited is up slightly to $5.60 at the time of writing – a 52-week high for the stock.

CSR shares were $4.50 at this time last year, with a noticeable uptick in price evident from an August 2017 low of $3.90.

CSR has been selling off surplus land at a 10-hectare site in Horsley Park NSW this month, with earnings from the sale to be included in the results for the full year ending March 31, 2019.

Horsley Park is pegged as an attractive industrial location, with CSR primed to take advantage of Western Sydney’s strong demand for industrial property.

Moves by companies such as Lendlease Group (ASX: LLC) and Stockland Corporation Ltd (ASX: SGP) to focus on higher-density residential housing options will only serve to open up more opportunities for the likes of CSR going forward.

Investors are keeping their eyes peeled for CSR’s annual report and preliminary finance report due next month.

GWA Group Ltd (ASX: GWA)

Shares in building fixtures and fittings company GWA Group Ltd are up 2.8% to $3.74 at the time of writing – a 52-week high for the stock.

GWA operates through two business divisions, including bathrooms and kitchens, and door and access systems with branch offices across Australia and New Zealand.

GWA released an investor market briefing on April 12, outlining its repositioning strategy to drive growth with market share in its bathroom and kitchens segment growing.

GWA continues to leverage off the strength of its household-name Caroma and Dorf brands and has a unique focus on delivering innovative solutions for water with plans to capture global market share in the segment.

GWA reported strength on all fronts with the release of its half-year results, with sales revenue up 2% and EBITDA up 5%.

Boral Limited (ASX: BLD)

While not at a 52-week high just yet, international building materials giant Boral Limited is definitely in the vicinity, with shares up 1.2% to $7.54 at the time of writing – a rise from just $5.86 at this time last year.

Boral is a building materials player most likely to leverage well from gains in the infrastructure space, with its core business in cement and plasterboard.

Morgan Stanley has recently flagged Boral as a buy, slapping an $8.50 share price target on the stock which is continually expanding its global reach, with its bricks and roof tiles products doing well in the US and its plasterboards in Asia.

Another one to watch in the space is Adelaide Brighton Ltd (ASX: ABC), with a share price rise of 0.4% to $6.27 at the time of writing.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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