Interface Inc (TILE)
Interface is a $1.54B maker of modular carpet for commercial and residential markets trading 19X Earnings, 1.59X Sales and 41.83X FCF with a 1% dividend yield.
Interface’s stock (TILE) has been a relatively lower revenue growth name for the past few years but expecting 2018 and 2019 with 4-5% growth while EPS growth seen at 17% and 12.5% the next two years. The carpet tile market is $3.2B which is seeing a secular shift away from broadloom carpet.
The global commercial flooring market is $26B with carpet tile only 12%, room to take share from broadloom and hard surface. It is estimated 65% of its market is driven by renovation versus new build. The Dodge Momentum Index is a leading indicator for construction spending for nonresidential buildings, and has been steadily rising since 2011. Office is the most important segment for TILE with 59% of its sales, while opportunity seen expanding in Hospitality and Education. The benefits of modular carpet include more creative freedom of design, no glue, lower cost to change, less waste, easy maintenance and faster installation. TILE has also introduced Modular Resilient Flooring entering the high growth luxury vinyl tile market. TILE has industry leading EPS growth & margins while having a large and expanding market opportunity with favorable Macro conditions.  Data sourced from Company website & presentation.
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Interface Inc (TILE) Stock Chart
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