Top Smart-Home Stocks to Buy in 2019
Smart homes and buildings are becoming increasingly popular with a projected market growth of 18% according to Acumen Researching and Consulting. The internet of things, and IFTTT (If this then that) has allowed for individuals to create systems that works together with minimal human intervention.
Automation and connected smart appliances have seen a huge rise in demand in recent years. Amazon recently acquired Eero and previously paid $1 billion to acquire Ring, a doorbell-camera startup. It had acquired Blink, a smart camera maker in 2017.
Google also invested heavily in the smart-home game a few years ago when it acquired Nest for 3.2 billion. Nest was quiet for a few years after its acquisition by Google but recently launched new temperature sensors, a video doorbell and an outdoor smart camera.
Smart lights, security, entertainment systems, and temperature control are the principle smart devices in demand. These products are surely to grow as we become more invested in energy-saving and healthy lifestyles.
Most of these smart devices work with voice assistants, but read carefully as not all are compatible, depending on your brand. Apple’s Homekit is an example of a software framework that lets you use a smart device with Siri.
Nest smart-home products at B&H
Here are the top companies developing smart homes products…
Cortana, the voice assistant, can be used to control compatible smart devices. The IFTTT chains helps you automate actions.
It has fallen with the tech sector but not as much and is now at a good price. It has been an early investor in AI and signs are that this is helping the BING search engine and search engines are one of the most profitable areas in the tech sector due to advertising. BING…
Sony Corp. ADR (SNE-N)
They offer a suite of voice assistant enabled smart products that help automate the home. You can even control your Sony TV through Google Home.
Diversified. PlayStation had supply chain disruption, but now picking up. One of the 3 main music companies, and that business has seen a resurgence with streaming. Lots of potential for cross-synergies between shows and gaming. Really good IP. Yield is 0.62%. (Analysts’ price target is $118.88)
Homekit, along with the Home app, is the company’s smart home system used as a platform for iOS user. The platform brings multiple devices together and coordinates their actions.
Good entry point or wait? He'd like to add in lower, but it holds in so well. One of the best all-weather stocks you can have. Performs well in periods of volatility, element of safety. Main driver will be continuing to get that install base, as services growth is where the story's going to come…
A leader in e-commerce and they sell smart home solutions that also works with their voice assistant, Alexa. They help you get what you need to turn your home smart, and a way to control everything.
Is cutting 9,000 more jobs Job cuts are coming in their most profitable division to protect margins. This is important. The consumer is weakening and business spending is shrinking. Tech is in a recession (for the past 6 months). Doesn't mean stock prices will decline further.
Alphabet Inc. (A) (GOOGL-Q)
They acquired Nest and is a big player in connected home devices. Many devices connect through their Google Home platform.
The question was on buying Google or Apple. He likes all the big techs. They are safe havens which will see very good earnings per share growth over the next 3 to 5 years through cost cutting. This includes Amazon which has some of the best businesses in the world, not the retail part though,…
Some stocks not on Stockchase are also worth mentioning : Alarm.com NASDAQ: ALRM, Control4 NASDAQ: CTRL and Sonos NASDAQ: SONO are among many smart-home stocks you should watch. Other companies are also involved and benefit from the home automation rise in demand even if they don’t develop consumer products themselves, here are more smart-home related stocks :
Canon Inc. (CAJ-N)
Smart all-in-one printers are the mainstay of a smart-office. Canon offers multiple solutions for big and small sized companies and help automate the workplace.
Unfortunately they have had a tough time. Camera division is doing extremely well. Coming out with new cameras. He is scrutinizing it hard. 4.2% dividend is safe. Strong balance sheet. If camera division takes a turn to the worse he would sell.
A supplier of billing and back-office support for telecommunication and cable companies. They offer real-time intelligence capabilities for contextualized customer engagement.
They make software for telcos and comms. AT&T is their biggest customer. Customers stick with their software and rarely change. They just bought Open Market. Trades at 20.6x trailing earnings. He targets $97.50. Shares have held up better than most software peers.
Logitech International SA (LOGI-Q)
Harmony Hub takes all your devices and lets you control them with your smartphone. They are working on creating a universal controller.
They make wireless computer mouses, pointing devices, etc. They benefitted during COVID as did their profits, because people were staying home. A high quality business with good cash flow. They are looking to enter, but not sure at what level.
Marvell Technology Group (MRVL-Q)
They produce storage, communications, and consumer semiconductors. Their digital semiconductors for consumer communications is used in smart home technology.
Silicon Laboratories Inc (SLAB-Q)
A semiconductor producer that is used widely in cell-phones and smart devices.
(A Top Pick Jan 26/05. Down 36%.) Face the opportunity for single chip cell phone technology to penetrate the low end of the market. Went up 30% and he sold. Looking at it again.
They create chips that power the smart home devices. They have good technical support, and could break out, but semiconductors have done poorly recently.
(A Top Pick Jan 05/22, Down 46%) You want to be in the S&P 100. He models $15.93, 40% lower than now. Trades at book value and pays 2.6%. The semis are highly cyclical.
A strong player in the IoT space, offering connectivity and machine intelligence to smart home technology. They offer security and automation technology to consumers.
She avoids the semis--very cyclical. They're overcoming too much inventory that they still need to work through.
They’re focusing on home security and automation systems to protect your home and family.
Great dividend. Cheap. Loads of upside potential. Analysts and market are looking for something to get going. Needs some catalyst to get people excited and the stock can get moving again. See his Top Picks.
AMERICA MOVIL, S.A.B. DE C.V. (AMX-N)
They are working on 5G technology and are working to commercialise smart products to tap into the IoT universe.
(A Top Pick June 5/07. Down 8%.) Largest cellular company in Mexico. Their capacity utilization of the network is superior to many other global ones. Very Bullish on this stock.
Home Depot (HD-N)
You can get everything you need to connect your home. They’ve profited from the DIY boom and smart homes could be the next big thing.
Wonderful future, loves its model. Trades at a premium to the market and to LOW. Today, he'd choose LOW.
Best Buy Company Inc (BBY-N)
A name synonymous with consumer technology. They offer a wide variety of smart homes devices, and smart home systems.
Made a ton of money during the pandemic. One of the better-run retailers, but can't see how this is a competitive advantage over the long term. Challenging times ahead with e-commerce everywhere, so he'd rather own the WMTs and AMZNs of the world.
Office Depot (ODP-Q)
They offer a smart home and office installation service that installs and connects Google and Nest products to you building.
Audiovox Corp. (VOXX-Q)
A custom home automation and consumer electronics company. They are working on connecting residential and commercial properties.
No debt and $160 million in cash, a little over $7 per share. Chairman owns 20%. Not widely followed.
Comcast Corp (CMCSA-Q)
Its Xfinity brand has driven their smart home products. They specialize in smart voice-drive TV experiences. They also have partnerships with home security and smart lock companies.
Hard time executing on plans. Fierce competition in cable and fixed wireless. Pace of broadband subscriber additions much weaker than expected. Peacock streaming way below target. One of the cheapest names in the space at 10x earnings. Free cashflow yield is high at 9%. Buying back stock. Safe holding. Could go into mid-40s in the…
ABB Ltd. (ABB-N)
A Swedish-Swiss multinational that develops robotics, power, and automation technology. They are working on building smart grids. These grids are adaptive and responsive, and many current infrastructure needs replacing. These smart grids have a big potential when these infrastructures are redone.
Engineering company out of Europe.Robotics is a growth industry.Strong company that will perform well in the long term.Current share price a good time to buy.
Honeywell International (HON-N)
They have consumer smart home solutions, including thermostats, and security systems. It has a good management team and they have good branding.
(A Top Pick Mar 10/22, Up 4%) Sold in January on valuation. Traded at 25% premium to the market, which was not sustainable.
General Electric (GE-N)
They have smart outlets and security systems. However, it’s been beaten down a lot, and analysts are wary. They are not cash flow positive, and the business is trying to sell off assets trying to survive.
Stock price has come on, though perhaps not in the larger context. Gets credit for performance in 2023. Purging of really good assets to bolster cashflow. Trying to resurrect assets from the trash bin or close to it. Doing OK, but still a cashflow problem. Better choices elsewhere.
Johnson Controls (JCI-N)
An automotive batteries and electronics, and HVAC equipment producer. They also have their building automation system. The system helps keep occupants safe and productive.
They make HVAC and security systems. JCI is exposed to non-residential construction which scares some, but nearly half their business comes from servicing existing equipment--a steady stream of revenues. It trades under 17x PE, a 14% growth rate and 1.2% PEG ratio.
Eaton Corp. (ETN-N)
Provides engineering equipment to different companies. They are a key player in the global human machine interface (HMI) race. HMI is a growing market especially due to the rising demand for lower expenses.
She bought it recently, because it will be tied to the supercycle is coming. Has a lot of upside in earnings in the next 3 years.
They manufacture electronic instruments and electromechanical devices. They make monitors for many industries, including pharma and oil. A leader in highly engineered electrical connectors.
Electronic equipment that makes monitors for many industries from pharma to oil. Established international company. ROIC rose from 14% in 2009 to 26% now. Stock is still cheap. $17B market cap. $3.8B in revenue. Consistent, well-diversified company.
Anixter International (AXE-N)
A communications and security products company. They offer a full-line solutions. A leader in helping businesses and communities build reliable systems.
(Top Pick Oct 4/13, Up 2.40%) It is core industrial America. Just made an acquisition that will be accretive right off the bat.