Bullish stock to watch: Ufp Industries Inc (NASDAQ: UFPI)

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Ufp Industries Inc (NASDAQ: UFPI) stock rose over 5.6% on 23rd July, 2020 (as of 12:59 pm GMT-4; Source: Google finance) after the company posted better than expected results for the second quarter of FY 20. For the second quarter of FY 20, there is 24% increase in the earnings from operations to $92.4 million, and 22% rise in net earnings attributable to controlling interest to $66.5 million. There is 22% increase in EBITDA to $110.4 million. The company has generated the net sales of $1.24 billion, which is on back of higher lumber prices that contributed 3 percent in net sales which was substantially offset by a 3 percent decrease in units sold. The company’s operating cash flow has more than doubled to $147.2 million for the first six months of 2020, which represents an increase of 107 percent over the same period of 2019. Cash reserves is more than debt by almost $37 million.

Further, the company has recently acquired T&R Lumber, which manufactures and distributes a range of products used mainly by nurseries, including tree boxes, plastic containers, stakes and trellises. New product sales rose 6 percent, due to almost 16% growth in retail sales

UFPI in the second quarter of FY 20 has reported the adjusted earnings per share of $1.08, beating the analysts’ estimates for the adjusted earnings per share of 58 cents, according to analysts polled by Thomson Reuters. The company had reported the adjusted revenue of $1.242 billion in the second quarter of FY 20, beating the analysts’ estimates for revenue of $1.08 billion.

Moreover, in UFP Retail segment, there has been 26% rise in net sales to $609.2 million over the second quarter of 2019. Retail unit sales grew 22 percent, with higher selling prices rising sales by 4 percent. In UFP Industrial segment, the net sales declined 23% to $224.4 million from the second quarter of 2019.

Additionally, the company’s long-term credit facilities and cash currently offer more han $562 million in available liquidity, and it continues to maintain a strong pipeline of acquisition targets.  The company has declared a quarterly dividend payment of 12.5 cents a share, which represents a prorated 25 percent increase over the dividends paid in 2019. The dividend will be payable on September 15, 2020, to shareholders of record on September 1, 2020. During the first quarter, the company had repurchased 750,000 shares of its common stock at an average price of $38.62. The company has authorized to repurchase an additional 1.1 million shares.

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