10 Best Industrial Distribution Stocks to Buy Now

03. Beacon Roofing Supply, Inc. (NASDAQ:BECN)

Number of Hedge Fund Holders: 46

Beacon Roofing Supply, Inc. (NASDAQ:BECN) is a key player in the industrial distribution sector, specializing in the distribution of residential and non-residential roofing materials and complementary building products. The company serves a diverse customer base, including contractors, home builders, and retailers across the United States and Canada. With its broad portfolio of pitched and low-slope roofing materials, insulation products, and a wide range of tools and equipment, Beacon Roofing Supply, Inc. (NASDAQ:BECN) comprehensive offerings position it as an essential industrial distributor for construction and roofing needs.

Beacon Roofing Supply, Inc. (NASDAQ:BECN) is backed by growing institutional interest, with hedge fund holders increasing to 46 in the second quarter of 2024, up from 41 in the previous quarter. This signals confidence in the company’s long-term growth potential. Despite missing earnings expectations in Q2 2024, reporting an EPS of $2.32 compared to the expected $2.82, the fundamentals of the stock remain strong.

The company reported record net sales of nearly $2.7 billion, a 7% year-over-year increase, driven by price increases and acquisitions. Residential roofing sales rose by over 2%, with higher prices counteracting lower shipments in storm-affected regions. Acquisitions played a significant role in boosting the company’s growth, with recent purchases adding 4% to daily net sales. Beacon Roofing Supply, Inc. (NASDAQ:BECN) has been proactive in expanding its market presence, opening 13 new branches year-to-date and acquiring key companies like Roofers Mart of Southern California, which bolsters its commercial roofing business.

Beacon Roofing Supply, Inc. (NASDAQ:BECN) adjusted EBITDA margin reached double digits again, underscoring its profitability and operational efficiency. Gross margin came in at 25.6%, a slight improvement over the previous year. The company’s digital platform also saw impressive growth, with digital sales increasing by 22% year-over-year, enhancing customer loyalty and contributing to margin improvement by 150 basis points.

With continued investment in operational excellence, strategic acquisitions, and a focus on shareholder returns through initiatives like its share repurchase program, Beacon Roofing Supply, Inc. (NASDAQ:BECN) is ideally situtated for future growth, making it a strong industrial distribution stock to consider.