This Texan's Getting Bigger

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OK, Fools, I have thoughts for you about a company that stands to benefit when housing improves, is in the midst of capacity increases that will raise production substantially, and is already doing quite nicely in the earnings department.

Dallas-based cement manufacturer Texas Industries (NYSE: TXI) has released solid results for its February-ended quarter. The company's revenues improved by 6% to $230.5 million, while its earnings reached $14.6 million, or $0.53 a share, up from $12.7 million, or $0.50 a share, last year. Apparently, the dart throwers had expected earnings of just $0.39 a share.

Texas Industries is in the process of expanding its cement capacity, such that over the next few years, its rated cement-producing capacity will grow from a current five million tons annually to about eight million tons.

There are, of course, other ways to play cement domestically, including the flexible Eagle Materials (NYSE: EXP) and Vulcan Materials (NYSE: VMC). In terms of international plays, there's also Fool newsletter pick Cemex (NYSE: CX), which is based in Mexico but also derives a significant chunk of its profits from U.S. sales.

But as much as anything, I'm attracted to Texas Industries because of its prospect as a takeout candidate in a consolidating industry. Given the company's quality assets and prime locations, I don't see how it can continue to operate ad infinitum as a stand-alone.

For related Foolishness:

• Texas Industries Cements a Quarter
• Time for a Hard Look at Cement
• Low Demand Sinks U.S. Concrete