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.
We aren't to going to have enough homes for retirees. Living in your home is going to be a big thing and reverse mortgages are going to be a big thing. He does not know if equitable is going to be the place to play this. He would partial sell these REITs at the moment.
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.
He was a shareholder when they announced their dividend cut last year. They had a hiccup when they tried to re-purpose storage tanks. The dividend is more sustainable than it was before. With the transition underway they have converted a number of storage terminals. Their aviation services business is a much more stable business and…
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.
Pays a 4.3% yield. It's a trading stock, moving up and down. The highs are getting lower over time, though it's not a bearish chart. He isn't bullish and would buy elsewhere.
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.
Large higher-end home builder in the U.S. Technically has come back. Still negative earnings. Too late in the cycle. Chart looks good but fundamentals aren't supporting the story. You want both fundamentals and price chart, and we don't have the fundamentals in this one yet.
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.
The biggest U.S. home builder that's acquired other hold builders. They operate mostly in the U.S. south (west and east). Trades at 7x earnings and below book value. Cheap. (Analysts’ price target is $57.10)
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.
Shares in US homebuilders have come off. Backup in interest rates is stalling demand for houses in US. Similar to auto market, in that once it starts to roll, it’s not something you want to trade over the short term.
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.
(A Top Pick June 15/16. Up 42%.) As with the banks, this is one that you Buy and be patient with. Home formations in the US have been below trend for years and years. People have to live somewhere and the homebuilders will do well over time.
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.
(A Top Pick Oct 18/16. Up 3%.) A relatively small homebuilder in a handful of states, primarily in the south west, and branded under a lot of different names. They also have some exposure to Texas. Thinks the whole group will move because household formation is still in a low trend. It has moved in…
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.
Many are surprised that this--in the home-building space--is doing well now. They did 11,000 home closings last year at $4.5 billion revenue. He's bullish on the economy and KBH has done a great job finding active adult buyers, so many that they are having trouble keeping up with demand. This will do well in a…
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.