Top 11 Home Builders & Housing-Related Stocks to Buy in 2019
Home building is very cyclical and momentum oriented. It really depends on where we are in the economic cycle, and how housing is performing. Building starts have remained strong, and there’s still demand but not enough supply. Labour and land shortages will also push prices up. In a lowering interest climate, these stocks tend to do well, where as if the interest rate rises, they usually take a hit. If you can put up with a little bit of volatility, this sector would not be a bad idea. People have to live somewhere and the home builders and construction companies will do well over time.
Equitable Group (EQB-T)
A mortgage lender that pays a good dividend. It makes loans to on-conventional borrowers, so it has more risk than other companies. They raised dividends three times over the year and it is currently trading at 6.5x earnings. They experienced a good bump in stock prices after dealing with the Home Capital concerns from last year.
A great business with a strong management team. They take advantage of inefficiencies in Canadian industry that banks are not doing. Their bank offering is doing well with increase in account openings. They have seen big deferrals from last quarter but it has now stabilized. There is good organic growth and a possible expansion of…
Genworth MI Canada Inc. (MIC-T)
They are a subsidiary of an American parent company. Banks tend to give some of their business to them. A non-bank financial and sells insurance on mortgages. They have a solid balance sheet and do not insure high risk mortgages.
Share price on the path to recovery. Scores well on valuation, but held back by price momentum. Trades cheaply. Solid yield. Beat most recent quarter. Housing markets have been incredibly resilient. Could see himself as a buyer as they rotate into financials.
Chartwell Seniors Housing (CSH.UN-T)
The largest company in the seniors housing sector. They pay a good dividend of around 4% and raises it by 2% per year. Occupancy rates have dipped a little, but it should improve over time, and in the meantime, you are paid to wait.
She's owned this for years and will continue to. During Covid, their occupancy rates dove obviously, but now she expects that to slowly recover--was 90%, now at 77%. She originally bought this for the need for long-term care for an aging population, and this trend hasn't changed. CSH operates 90% of its business in private…
Pulte Homes Inc (PHM-N)
The third largest home construction company in the U.S. It is a Fortune 500 company. They are specialized in large higher-end home building. Although their technicals are looking better, they have negative earnings still. The fundamentals are not supporting the chart.
(A Top Pick Mar 10/20, Up 37%) Wouldn't buy it today. There are just other US picks with better metrics. Picked it 1 week before the markets bottomed last March. Home builders have very limited inventory. It is increasingly difficult to get building materials. Good return on equity. One of the largest home builders. 8x…
Lennar Corp. (LEN-N)
The largest home construction company in the United States after a takeover in 2018. They operate mostly in the U.S. south but they are acquiring other hold builders. The stock is considered undervalued and trades at about 7x earnings.
They report Monday. Excellent managers. He wants them to talk about supply shortages and home demand. Lennar is important to retail, banking and the hybrid work from home economy.
D R Horton Inc. (DHI-N)
A leader in the home building space. It is considered to be the largest home builder in the world. There is a shortage of lots to build on and getting permit approvals, so they are struggling to meet demand.
He likes the homebuilder correction; DHI is down 16% from its YTD highs to 7.5x forward earnings. Time to buy.
Toll Brothers Inc. (TOL-N)
A luxury home builder in major metropolitan areas in the United States. A good long term play where those who are patient will be rewarded. They have a lot of land holdings and will do well over time.
Stockchase Research Editor: Michael O'Reilly We reiterate our TOP PICK recommendation of TOL as a luxury home builder. Continued low interest rates continues to spark new construction allowing the company to pay down debt, buy back stock, while growing cash reserves. It pays a small dividend, backed by a payout ratio under 15% of cash…
Tri Point Homes, |Inc (TPH-N)
A relatively small home builder primarily in the south west United States. They also have activities in Texas. Labour and land costs hold them back and there is a disconnect between demand and supply.
Entry-level homebuilder. The industry has lots of moving parts and negative news. Don't let this sway you. We're still in the nascent part of the cycle. There's a home supply problem. EPS could touch $4 in the next two years.
Hovnanian Enterprises (HOV-N)
A fully integrated construction company that is involved in marketing, design, construction and sales of homes. They missed expectations this year, and the stock price seems to be undervalued now.
We are currently under-building and homebuilders are very attractive. They are now generally trading below book value. This wouldn't be his first choice because of the leverage they have.
KB Home (KBH-N)
The first home builder to be publicly traded on the NYSE. Lower interest rates have benefitted this company. It could be a good opportunity if you believe interest rates will continue to be depressed.
Trades at less than 7x earnings. Cheap. This and its peers are pricing in a much higher mortgage rates and no customers in the future. So, they don't reflect the current rampant demand for new homes. If the Fed's Jay Powell keeps interest rates low, homebuilding stocks will roar. The U.S. is currently building 1.6…
Gafisa SA (GFA-N)
One of the largest Brazilian residential construction and real estate companies. Moody’s withdrew their rating of the company due to business reasons at the end of 2018. The company specializes in middle to high income residential homes as well as commercial properties in Sao Paulo and Rio de Janeiro.
(A Top Pick Nov 13/09. Down 23%.) South American homebuilder. Emerging market stocks have really dropped off from that time. Avoid this one for now.