D.R. Horton (NYSE:DHI)
D.R. Horton is a leading homebuilder in the United States with operations in 98 markets across 31 states. D.R. Horton mainly builds single-family detached homes (over 90% of home sales revenue) and offers products to entry-level, move-up, luxury buyers, and active adults. The company offers homebuyers mortgage financing and title agency services through its financial services segment. D.R. Horton’s headquarters are in Arlington, Texas, and it manages six regional segments across the United States.
PulteGroup Inc is one of the largest homebuilders in the United States, operating in 40 markets across 23 states. The company mainly builds single-family detached homes (85% of unit sales) and offers products to entry-level, move-up, and active-adult buyers. PulteGroup offers homebuyers mortgage financing and title agency services through its financial services segment. The company is headquartered in Atlanta.
Headquartered in Reston, Virginia, NVR is one of America’s leading home builders. It serves homebuyers in 31 metropolitan areas and 14 states. Home units are built and sold through its subsidiary brands, Ryan Homes, NVHomes and Heartland Homes. The company also issues mortgages to help finance homes.
The company stock has an EPS of $218.57 and a P/E ratio of 14.12. It has a market cap of $11 billion and trades over 35,000 shares per day. NVR generated total revenue of $7.4 billion in 2019.
In February 2020, NVR declared that its board of directors has authorized the repurchase of $300 million of its outstanding common stock. The company indicated that the authorization is a continuation of the stock repurchase program that began in 1994 and is consistent with NVR’s strategy of maximizing shareholder value.
Skyline Champion (NYSE:SKY)
Skyline Champion Corp is a factory-built housing company in North America. The company offers a portfolio of manufactured and modular homes, park model RVs, accessory dwelling units and modular buildings for the multi-family, hospitality, senior and workforce housing sectors. It designs and builds a range of manufactured and modular homes, park model RVs, ADUs, and commercial structures. It builds homes under brand names in the factory-built housing industry including Skyline Homes, Champion Home Builders, Genesis Homes, Athens Park Models, Dutch Housing, Excel Homes, Homes of Merit, New Era, Redman Homes, ScotBilt Homes, Shore Park, Silvercrest, and Titan Homes in the U.S., and Moduline and SRI Homes in western Canada.
Toll Brothers (NYSE:TOL)
Toll Brothers is the leading luxury homebuilder in the United States with an average sales price well above public competitors’. The company operates in 50 markets across 24 states and caters to move-up, active-adult, and second-homebuyers. Traditional homebuilding operations represent most of company’s revenue. Toll Brothers also builds luxury for-sale and for-rent properties in urban centers, primarily on the East Coast. The company’s headquarters is in Horsham, Pennsylvania.
Home construction may slow down but never comes to a screeching halt. As of April 2020, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development announced that more than 1 million building permits have been issued. The COVID-19 pandemic caused a run on the real estate market unlike anything we’ve seen, and there are gaps in the market that could easily be filled by home builders like those listed below. You may want to invest in residential property construction through home builder stocks today.
Quick Look at the Best Home Builder Stocks:
Overview: Home Builder Stocks
Constructing a home could be the biggest investment you make during your lifetime. These stocks could be reaching for new highs, with 974,000 housing starts, according to the U.S. Census.
Home builder stocks plunged in April 2020 at the outset of the COVID-19 pandemic — PulteGroup (NYSE: PHM) went down 66%, Toll Brothers (NYSE: TOL) by 64% and KB Home (NYSE: KBH) by 60%. However, all of these companies recovered as the upswing in the real estate market lifted pretty much every firm in the industry.
Plus, home builder companies have a proven record of making a strong comeback after economic crises. After the 2008 market crash, Lennar (NYSE: LEN) bounced back by 175%, KB Home (NYSE: KBH) by 111%, NVR (NYSE: NVR) by 131% and DR Horton (NYSE: DHI) by 90% by as early as March of 2009.
The temporary setback to the home builder market might have made it cheaper for you to buy into these stocks. But even with the recent dip in stock quotes, you won’t find many stocks under $20 on the home builder market. Invest in these stocks now and buckle up for the rocky road to recovery ahead.
Best Online Brokers for Home Builder Stock
Online brokers provide a robust set of tools to help you filter the listed companies on the stock exchange. For example, you can customize the price range of the stock screener to show you top stocks under $10.
Here are some of the best online brokers to get you started.
Features to Look for in Home Builder Stock
- Earnings per share: The earnings per share (EPS) of a company is a good indication of its profitability. You can calculate the EPS of a company by dividing its net income by its total number of outstanding shares. Keep track of the EPS reports to assess if the company is beating estimates or underperforming in the market.
- P/E ratio: The price-earnings (P/E) ratio can help you determine whether a stock is undervalued or overpriced. The lower the P/E ratio, the better the stock is as an investment. Since most home builder stocks are expensive to buy, their P/E ratios will not be as low as penny stocks under $5.
- Yearly revenue: The total revenue generated by these stocks can be key to making investments. Compare historical revenue records to examine a company’s growth over the years before you invest.
Cement Your Financial Growth
The wide variety of home financing options available in the market has made it possible for anyone to build a dream home. Investing in home builder stocks can strengthen your portfolio as long as you do the research to make sure it fits well into your portfolio.
What are home builder stocks?
Home builder stocks are shares of companies that engage in residential home construction.
Are home builder stocks a short-term or long-term investment?
For best results, investors should consider home builder stocks as a long-term investment.
Where can I find brokers to invest in home builder stocks?
You can find brokers to invest in home builder stocks on the list above.