3 building materials stocks to watch in the current market

The infrastructure segment is booming and investors banking on a continuation of the trend should have these 3 building materials shares on their current watchlist.

Brickwords Limited (ASX: BKW)

Shares in Brickworks Limited have printed a 52-week high this week as the diversified clay and concrete manufacturer continues to go from strength to strength.

Earlier this month Brickworks updated shareholders on its purchase of natural stone manufacturer Urbanstone – adding the business unit to Brickwork’s portfolio as a means of “strengthening” the company’s market leadership position.

Brickworks last year established Southern Cross Cement – a joint venture company owned by Brickworks, the Neilsen Group and the Neumann Group to bolster its already-existent concrete products business.

The company has further diversified its portfolio with a significant shareholding in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and is poised to continue to leverage on the strength of the infrastructure sector, alongside sector cousins Transurban Group (ASX: TCL) and Sydney Airport Holdings Pty Ltd (ASX: SYD).

The Brickworks share price has seen some volatility in the last 12 months, but is well above its $14.67 price at this time last year, sitting up 0.8% to $16.27 at the time of writing.

Boral Limited (ASX: BLD)

Shares in international building and construction materials giant Boral Limited were down 0.9% to $6.58 at the time of writing off the back of an investor presentation on May 16 which saw the share price rise to a $6.68 close.

Boral made no changes to its FY18 guidances but reported robust demand across the sector and a pipeline of projects to 2022.

According to Fnarena Deutsche Bank have rated Boral as a buy at present, with improved margins expected out of Boral in the future and a price target of $7.65 on the stock.

All eyes are on the company’s successful integration of its North American Headwaters acquisition with Boral promising “transformational growth” in the region as a result.

CSR Limited (ASX: CSR)

Shares in building products manufacturer CSR Limited have been tracking upwards steadily in the last 12 months to land at $5.28 at the time of writing – a rise of 26% from a share price of $4.19 at this time last year.

CSR impressed the market earlier this month with its full year results presentation reporting a revenue boost of 6% to $2.6 billion, NPAT growth of 16% to $212.7 million and EBIT up 9% to $323.8 million.

The strong results were buffered by growth in Gyprock, Hebel, Bradford and PGH business units with the company’s strong financial position supporting its investment in building products and property with major projects including a $75 million expansion of Hebel at Somersby, NSW, due for completion in March 2019.

Far from small fry, CSR’s market cap is currently sitting at $2.65 billion with its 70% interest in Gove Aluminium Finance Limited also a boon for its portfolio.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited, Transurban Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Brickworks. 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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