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Why the James Hardie share price is up 90% in 2019

The James Hardie Industries PLC (ASX: JHX) share price has been a top performer on the ASX this year.

James Hardie shares are up 90% so far this year on the back of consistent increases in earnings. 

So, is there still time to buy into James Hardie or should you be looking elsewhere for value on the ASX?

Why the James Hardie share price is surging higher

The biggest catalyst for the company’s capital gains this year has been consistently strong earnings.

Back in May, James Hardie shares rocketed higher after a 57% in net operating profit to US$228.8 million ($331.3 million).

Revenue surged 22% higher to US$2.51 billion as the company’s Fermacell acquisition in Europe and growth in its North American Fibre Cement business flowed through to the bottom line.

A strong growth forecast for FY 2020 saw the James Hardie share price rocket higher in May despite a lag in the company’s European business.

The Aussie building materials supplier continued its bumper year with further earnings increases in November.

The company reported adjusted net operating profit (NOPAT) of US$98.6 million for the September quarter and US$188.8 million for the half year.

Those represents double-digit growth figures for the Aussie group and investors were clearly impressed.

The James Hardie share price rocketed to a record high of $29.11 per share last week and have been climbing higher for years.

The company’s shares are up 282% in the last decade and that’s not even counting its 1.38% dividend yield.

Is James Hardie good value compared to the ASX 200?

The James Hardie share price has been a top performer among the ASX 200 stocks so far this year.

The company has outperformed the benchmark S&P/ASX 200 Index (INDEXASX: XJO) but is trading at an expensive 33x earnings multiple.

I’d be waiting until the company’s next earnings release in May 2020 before buying into the stock.

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Motley Fool contributor Kenneth Hall 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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