A Member of Pat McKeough’s Inner Circle recently asked for his advice on H.B. Fuller Company, one of the world’s largest pure-play industrial adhesives manufacturers which serves packaging, construction, hygiene, electronics, automotive, and medical end markets.
Pat likes the firm’s new strategic positioning. A multi-decade record of paying and steadily raising dividends supports a sound total‑return profile anchored in both earnings growth and disciplined shareholder returns. However, Pat notes that revenue fell in the latest quarter and that if the economy remains uncertain, the company may have less room to rely on mix, pricing, and cost cuts to drive incremental profit gains, especially once raw‑material deflation and restructuring benefits are fully realized.
H.B. Fuller Company (Symbol FUL on New York; www.hbfuller.com) is a leading maker of adhesives, sealants, and other specialty chemical products. It has 7,500 employees worldwide.
Founded in 1887 and incorporated in Minnesota in 1915, the company sells its products in over 140 countries. Its sales operations span 35 countries in North America, Europe, Latin America, Asia Pacific, India, the Middle East, and Africa.
Fuller’s core product is industrial adhesive. The company’s customers use its glues in the making of common consumer and industrial goods, including food and beverage containers, disposable diapers, medical products, windows, sportswear and footwear.
Plus, Fuller offers a variety of products for residential, commercial, and industrial construction markets. These include sealing and waterproof solutions for airports, roads, highways, bridges and utilities.
The company continues to transform its business by acquiring high-profit-margin businesses while disposing of low-margin ones.
In late 2024, Fuller acquiredf two leading medical adhesive technology firms, GEM S.r.l. and Medifill Ltd.
Based in Italy, GEM S.r.l. makes medical adhesives for the European market. With the acquisition, Fuller relocated its Medical Adhesive Technologies business in Europe to Viareggio, where G.E.M. is based.
Medifill Ltd., based in Dublin, produces medical-grade cyanoacrylate (superglue) adhesives. The company has a state-of-the-art clean room for manufacturing wound closure products.
Fuller paid 180 million euros ($188.9 million U.S.) for the two businesses. They are now
operating within the company’s Hygiene, Health & Consumable (HHC) adhesives unit.
In mid-2025, the company sold its flooring business. Pacific Avenue Capital Partners, a Los Angeles-based private equity firm, paid $80 million.
In addition, the company is combining its Insulated Glass, Woodworking, and Composite segments with its Roofing and Building Envelope and Infrastructure (BE&I) segments to form Building Adhesive Solutions.
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Fuller’s restructuring and lower raw material prices lift profitability
In the three months ended February 28, 2026, Fuller’s revenue fell 2.3%, to $770.8 million from $788.7 million a year earlier. Higher prices were more than offset by a 7.2% volume decline.
Excluding one-time items, Fuller earned $31.5 million, or $0.57 a share, in the latest quarter. That was up 6.0% from $29.7 million, or $0.54 a share. The higher earnings reflected lower raw material costs as well as savings from the company’s Quantum Leap restructuring program.
Going forward, Fuller’s outlook is positive—but even with its leading market share, it needs a stronger economy to boost its revenue. Meantime, though, the company has broad geographic and end-market diversity. Also, demand for paints, sealants, coatings and adhesives tends to remain steady even in an economic downturn.
At the same time, Fuller’s transformation plans are succeeding. Through the sale of its Flooring business and recent acquisitions, the company continues to make progress in shifting its business toward higher-margin, faster-growing markets. It plans to make further acquisitions with that goal in mind.
Fuller raised its quarterly dividend by 5.6% with the May 2025 payment, to $0.2350 a share from $0.2225. This marks the 56th straight year of annual increases. The stock now yields 1.5%.
Recommendation in Pat’s Inner Circle: H.B. Fuller Company is okay to hold.
