After the Storms: Post-Hurricane Rebuilding Buys

11/16/2017 5:00 am EST

Focus: INDUSTRIALS

Harry Domash

Publisher, DividendDetective and Winning Investing

The construction industries, both residential and commercial were already improving before the hurricanes and fires destroyed or severely damaged thousands of buildings, explains income specialist Harry Domash, editor of Dividend Detective.

But analysts following players in that field aren’t predicting much of a business spike resulting from those events. We disagree, and this month we’re adding two more picks in the construction field likely to exceed analyst expectations over the next six to 12 months.

We’re adding one stock to our Manufacturing & Services portfolio; the company rents, sells and services cranes and earthmoving equipment, among other items.


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We’re adding H&E Equipment Services (HEES) to the portfolio. H&E rents, sells, and provides parts and service support for aerial work platform equipment, cranes, earthmoving equipment, and industrial lift trucks.

H&E’s September quarter earnings came in $0.32 above analyst forecasts, and up 130% vs. year-ago. Dividend yield is 3.4%.

Our second construction industry pick, a real estate investment trust (REIT), owns and operates timberlands and also produces finished lumber, plywood and other wood products.

We’re adding timber producer Potlatch (PCH) to the portfolio. Potlatch owns timberlands in Arkansas, Idaho, Minnesota and Wisconsin. Its wood products unit manufactures lumber, plywood, and particleboard. September quarter EPS rose 21% vs. year-ago on a 9% gain in revenues.

Potlatch recently agreed to acquire competitor Deltic Timber (DEL) and that transaction could result in a significant special dividend payable by the end of 2018. In October, Potlatch raised its quarterly dividend by 7%. Yield is 3.1%.

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