Insteel Industries, Inc. IIIN and Atkore Inc. ATKR are two prominent names operating in the wire and cable products industry. As rivals, the companies are engaged in providing steel wire reinforcing, metal framing and fittings and other infrastructure products and solutions to the non-residential and residential construction markets. Both companies are poised to benefit from significant growth opportunities in the construction sector, driven by the resiliency of repair and remodelling activity. Let’s take a closer look at their fundamentals, growth prospects and challenges.

The Case for Insteel Industries

Headquartered in Mount Airy, NC, IIIN is a leader in manufacturing steel wire reinforcing products for concrete construction applications. The strongest driver of Insteel Industries’ business at the moment is strengthening demand across its end markets, buoyed by the upturn in construction activity and positive contributions from its acquired assets.

The company has been witnessing improved demand for its PC strand products, on account of the expansion of the Section 232 steel tariff to derivative products by the U.S. administration. In the second quarter of fiscal 2025, its net sales increased 26.1% year over year to $160.7 million, reflecting a 28.9% increase in shipments.

The company expects to capitalize on growth opportunities in the non-residential construction market, supported by strong federal funding from the Infrastructure Investment and Jobs Act. This is likely to drive significant project activity in the quarters ahead, which should support higher shipments and operating levels for IIIN. 

Insteel Industries also remains focused on acquiring businesses to gain access to new customers, regions and product lines. For instance, in October 2024, IIIN acquired substantially all of the assets of EWP and certain related assets of LSG (the EWP Acquisition). The EWP buyout expanded its welded wire reinforcement (WWR) product portfolio and strengthened its competitive position within the Midwest market. Also, the acquisition of certain assets of O’Brien Wire Products (in November 2024) enhanced its WWR product offerings across the non-residential and residential construction markets.

IIIN remains committed to rewarding its shareholders with dividend payouts and share buybacks. For instance, in the first six months of fiscal 2025, it remunerated its shareholders with a dividend of $20.6 million and repurchased shares worth $1.7 million.

The Case for Atkore

Based in Harvey, IL, Atkore is well-known for its diversified electrical infrastructure products and service solutions in the United States and internationally. ATKR is benefiting from the solid demand for its metal framing, cable management and construction services from the data center market. Also, growing popularity for its metal electrical conduit and fittings as well as electrical cable and flexible conduit products has been positive for the company.

The company’s investment in enhancing its construction services capabilities has also been enabling it to support global megaprojects and increase its participation in water-related markets. Driven by favorable trends in the construction market, organic revenues in the Safety & Infrastructure segment increased 3.4% year over year in second-quarter fiscal 2025.

Atkore continues to increase shareholders’ value through dividend payments and share buybacks.  For instance, in the first six months of fiscal 2025, the company paid dividends worth $22 million and repurchased shares worth $100 million. In April 2025, it hiked its dividend by 3.1%. Also, in April 2024, the company’s board approved a new $500 million buyback program.

However, the escalating operating costs and expenses pose a threat to ATKR’s bottom line. In the second quarter of fiscal 2025, the company’s cost of sales rose 3% year over year. The metric, as a percentage of net sales, increased from 63.2% in the year-ago-quarter to 73.6%. Its gross margin declined 1,040 basis points to 26.4% in the quarter.

Story Continues

The Zacks Consensus Estimate for IIIN & ATKR

The Zacks Consensus Estimate for Insteel Industries’ fiscal 2025 earnings is pegged at $1.86 per share, indicating an increase of 34.8% over the past 30 days. The figure also indicates year-over-year growth of 87.9%.Zacks Investment Research

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The Zacks Consensus Estimate for Atkore’s fiscal 2025 earnings stands at $6.00 per share, indicating an increase of 3.6% over the past 30 days. However, the figure indicates an year-over-year decline of 52.7%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Zacks Investment Research

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Price Performance and Valuation of IIIN & ATKR

In the past three months, IIIN shares have risen 27.5%, while ATKR stock has gained 4.3%.Zacks Investment Research

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IIIN is trading at a forward 12-month price-to-earnings ratio of 14.46X, below its median of 15.43X over the last two years. ATKR’s forward earnings multiple sits at 11.53X, above its median of 9.73X over the same time frame.Zacks Investment Research

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Final Take

Insteel Industries’ robust momentum in the non-residential construction market, accretive acquisitions and growth investments bode well for strong growth in the quarters ahead. Additionally, the stock’s upwardly revised estimates instill investor confidence. In contrast, Atkore’s strength in the Safety & Infrastructure segment has been diluted by rising costs and expenses, which have been denting its profitability.

Given these factors, IIIN seems a better pick for investors than ATKR currently. While IIIN sports a Zacks Rank #1 (Strong Buy), ATKR currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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