For those looking to find strong Construction stocks, it is prudent to search for companies in the group that are outperforming their peers. Potlatch (PCH) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Construction peers, we might be able to answer that question.

Potlatch is one of 90 companies in the Construction group. The Construction group currently sits at #15 within the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.

The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. Potlatch is currently sporting a Zacks Rank of #1 (Strong Buy).

Within the past quarter, the Zacks Consensus Estimate for PCH's full-year earnings has moved 0.9% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.

According to our latest data, PCH has moved about 1.2% on a year-to-date basis. Meanwhile, the Construction sector has returned an average of -13.6% on a year-to-date basis. This shows that Potlatch is outperforming its peers so far this year.

Watsco (WSO) is another Construction stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 6.9%.

The consensus estimate for Watsco's current year EPS has increased 0.7% over the past three months. The stock currently has a Zacks Rank #2 (Buy).

Looking more specifically, Potlatch belongs to the Building Products - Wood industry, which includes 10 individual stocks and currently sits at #209 in the Zacks Industry Rank. On average, stocks in this group have lost 7.6% this year, meaning that PCH is performing better in terms of year-to-date returns.

In contrast, Watsco falls under the Building Products - Air Conditioner and Heating industry. Currently, this industry has 7 stocks and is ranked #165. Since the beginning of the year, the industry has moved -8.6%.

Potlatch and Watsco could continue their solid performance, so investors interested in Construction stocks should continue to pay close attention to these stocks.

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

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