CSW

CSW Industrials is a high-quality, diversified niche industrial (HVAC/R, plumbing, specialty coatings, sealants) with an enviable long-term record — revenue has compounded from $626M (FY2022) to $1.08B (FY2026, up 23.3%) and margins are strong at a 41.9% gross and 15.6% operating. It runs a disciplined acquire-and-improve model, and FY2026 was a major M&A year: total assets jumped 68.0% and total liabilities surged 335.2% (long-term debt now $840M) to fund acquisitions, lifting liabilities/equity to 1.19x from a near-debt-free base.

That deal activity is also why the bottom line stepped back this year. Despite 23.3% revenue growth, net income fell 18.0% to $112M and EPS dropped 20.0% to $6.70, as acquisition costs, higher interest expense and intangible amortization (goodwill/intangible valuation are the company's flagged critical estimates) weighed on profit. Operating cash flow dipped 11.1% to $150M and cash fell 85.0% to $33.8M as the company deployed capital. Management remained shareholder-friendly, buying back $133M of stock (up 379.3%, shares down 2.9%) and raising the dividend 23.6%.