Fortune Brands Home & Security, Inc. FBHS business arm — Fiberon — recently signed a partnership deal with Wolf Home Products in a bid to strengthen its business footprint in the fast growing railing and wood-alternative decking market. Per the deal, Wolf Home Products will be distributing Fiberon-made capped composite cladding, railing, and decking products across the mid-Atlantic, Northeast, and South and North Carolina.

York, PA-based Wolf Home Products provides selective branded and privately sourced bath, kitchen, and building products in the market. The company is well known for its premium building products, as well as customer-centric sales support and distribution services. In addition to this, Wolf Home Products owns more than 3500 dealers, and maintains several distribution centres across the United States and Canada.

On the other hand, Fortune Brands’ Fiberon provides state-of-the-art wood-alternative products to its customers. The miscellaneous eco-friendly products offered by the company improve the living quality of modern homeowners. As mentioned above, we believe a distribution deal with Wolf Home Products will significantly bolster sales for Fiberon’s cladding, railing, and decking products, moving ahead.

Zacks Rank & Our Take

Fortune Brands currently carries an unfavorable Zacks Rank #4 (Sell). Over the past three months, the stock has lost 21%, wider than the 7.9% decline recorded by the industry it belongs to.

Rising cost has become a major cause of concern for the company, lately. Material price inflation (on account of tariffs) and flaring up freight charges are predicted to further escalate costs in the upcoming quarters. Notably, Fortune Brands expects that rising cost and inefficiencies prevailing in Security operations will dampen its near-term profitability. For 2018, the company anticipates earnings of $3.41-$3.49 per share, lower than the previous guidance of $3.62-$3.72 per share.

We also notice that over the past 60 days, the Zacks Consensus Estimate for the company’s earnings in 2018 and 2019 moved 5.8% and 7% south to $3.43 and $3.85, respectively. The downward estimate revision reflects bearish market sentiment toward the stock.

Stocks to Consider

Some better-ranked stocks in the Zacks Industrial Products sector are listed below:

Atkore International Group Inc. ATKR sports a Zacks Rank #1 (Strong Buy), at present. The company generated an average positive earnings surprise of 24.46% in the trailing four quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

DXP Enterprises, Inc. DXPE also carries a Zacks Rank of 1. The company generated an average positive earnings surprise of 112.62% in the trailing four quarters.

Brady Corporation BRC currently carries a Zacks Rank #2 (Buy). The company has pulled off a positive average earnings surprise of 5.20% in the past four quarters.

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