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…
Haven't owned it since 2001. A little overpriced. Still a medium-risk stock. (Mike S. Newton, CIM FCSI)
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.
This is not only a technology company. Much of its earnings are coming from games and movies. Both those areas are very difficult to predict. He sees better value elsewhere. (Lorne Steinberg)
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.
Own a position in a high-quality company like this and hold for the long term, then add when the street is critical of it. They have a ton of cash and are a great innovator. (Colin Stewart)
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.
They have a great money making machine of Amazon web services. They spread that money to other businesses. Not expensive with a PEG ratio of 1.78. (Analysts’ price target is $2125.38) (Kim Bolton)
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.
Big data alone will represent 30% of all data stored in data centers and Google is the leader here. Decently price with a PEG ratio of 1.61. They have great non-advertising revenues streams. A gem. 5.5% position in their portfolio. (Analysts’ price target is $1368.82) (Kim Bolton)
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. (Mark Grammer)
A supplier of billing and back-office support for telecommunication and cable companies. They offer real-time intelligence capabilities for contextualized customer engagement.
One theme she really likes is a company that provides products and services that other companies simply can't live without. This company is so ingrained with other businesses processes. They work with AT&T, BCE, Telus, Rogers and Vodafone. Do back-end billing, making sure you are getting charged what you are supposed to be charged for…
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.
A great brand name for computer accessories. Also a great way to participate in the global move to wireless Bluetooth, game stations and Xboxes. A great entry point. (Peter Hofstra)
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. (Ian Ainsworth)
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 Apr 25/18, Up 16%) There's a new CEO. This old-tech stock has done very well. He's long recommended it. (Brian Acker, CA)
A strong player in the IoT space, offering connectivity and machine intelligence to smart home technology. They offer security and automation technology to consumers.
It's an excellent long-term, 5G investment, but he suspects Apple's hand was forced to settle with QCOM last week, because the 5G chip Apple was developing with Intel failed to progress. It's a great settlement for QCOM, which has shot up with room to rise even further . Further, a US-China trade deal will benefit…
They’re focusing on home security and automation systems to protect your home and family.
He views this differently in the space, due to its high level of debt. They have made big bets on acquisitions. They have $170 billion in debt -- at some point this will bring risk. Its high dividend is also at risk to a future cut, he feels. (Kash Pashootan)
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. (Patricia Perez-Coutts)
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.
HD vs. LOW. He chooses Home Depot. Operationally, HD does a fabulous job. Lowes has underperformed. Demographics are working for both. Tailwind of about 5-10% in revenue. Not as susceptible to the Amazon effect. Lowes is a safe place to be, but muted on the growth. (Chris Stuchberry)
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.
There is a pattern that could be called a Double Top, and from there it has been in a downtrend. You have lower highs and lower lows. Until the stock starts to consolidate, with no more lower highs or lower lows, and breaks past the last high and past the 200-day moving average, you are…
Office Depot (ODP-Q)
They offer a smart home and office installation service that installs and connects Google and Nest products to you building.
Has been outperformed by Staples. Global. Good balance sheet. Good cash flow. New management coming in. (Robert Stovall)
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. (Thomas Kahn)
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.
Looks good and has built a nice base. It hits trouble at $40, but it could rise 10-12%, but he needs to see it to rise above $40 first before he'd trade it. Range-bound. (Elliott Fishman)
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.
Are they connected enough to green? They focus on smart grids, building grids that connect renewable projects. Now is an interesting time for grid development. Many, like Ontario's, are ancient and need updating. ABB is a play on smart (adaptive, responsive) grids, which are really expensive. If there's more infrastructure spending to update the grid…
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.
Likes it long-term, but it's been flat the past year, sideways. It's also cyclical which he's getting out of that and embracing defensive names instead. Honeywell isn't this. (Stan Wong)
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.
He has stayed way for a long time because it has been an enormous evolution since 2000. He does not know which of their businesses he wants to be involved in today. (David Fingold)
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.
(Top Pick Feb 6/17, Down 2%) He expects that it will probably get back to $42-$45. Typically auto does well until the end of May. (Keith Richards)
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.
(Market Call Minute.) He likes the industrials and this looks very interesting. They provide engineered equipment to different companies. (Stan Wong)
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. (Matt Kacur)
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. (Gordon Reid)