Pandemic or Not, These 4 Home Improvement Stocks Look Strong
Home improvement stocks outperformed last year, thanks to the pandemic that boosted home buying and improving. In the middle of 2021, home improvers will see demand increase. Despite the ease of pandemic restrictions and increasing outdoor movement, Americans continue to lean toward home renovation and maintenance projects. The prolonged indoor stint of the past year made people realize how important homes are. Industry experts believe that consumer discretionary home spending is likely to continue as the importance of properly maintaining homes here remains even after the pandemic.
Retailers of home improvement products have benefited from consumer investment to make homes enjoyable and comfortable. Refurbishing interiors to enable working from home and remote education is an important trend. Do-it-yourself (DIY) projects for remodeling, decorating, and maintaining furniture and fixtures are gaining in popularity. Home improvement products companies have witnessed increased demand for garden tools and products related to indoor hobbies such as tool boxes and paint.
Favorable housing market conditions, characterized by high home purchases, are a boon to retailers responding to home improvement needs. Low mortgage rates and high demand for homes have driven the housing market. Rapid urbanization trends also continue to benefit players in this space. Due to the development of real estate projects and the expansion of cities and towns, the demand for both home accessories and tools and equipment remained favourable.
Home improvement retailers have also witnessed an increase in online business transactions, thanks to growing digital dependence. This helps companies take advantage of robust demand conditions in the market. Industry participants are investing in strengthening omnichannel capabilities, including online ordering and delivery services.
Given the positives in the home improvement industry, investors may want to consider investing in stocks from this space. We’ve highlighted four such companies that are benefiting from their business expansion efforts and favorable market trends.
4 Prominent Picks
First on our list is the leading home improvement retailer – To see also : Raise the Roof–As Well as Your Income: A Guide to Starting Your Own Roofing Business.The Home Depot, Inc. HD. The company benefits from increased renovation and construction projects. It expands ranges and delivery systems to effectively meet market needs. Home Depot follows a flexible, interconnected infrastructure, allowing it to adapt to changing customer preferences. This Zacks Rank #2 (Buy) company benefits from broad strength across stores and geographies, as well as a growing presence in the digital arena. The company is working to boost omnichannel features such as curbside pick-up and online in-store pick-up with convenient pick-up lockers. The share has risen about 29% in one year. The Zacks Consensus Estimate for fiscal income for 2021 is up 0.7% in the past 30 days. You can see the full list of current Zacks #1 Rank (Strong Buy) stocks here.
Beacon Roofing Supply, Inc. BECN, with a Zacks Rank #2, is another potential pick. This roofing distributor is benefiting from an improved demand for residential products. In addition, the investments in boosting the technology infrastructure support the growth of the e-commerce platform. The new OTC (On-Time and Complete) Delivery Network and redesigned website empower customers in-store and online with improved product availability, delivery tracking, and notifications. The company is also committed to cost control. Shares of Beacon Roofing Supply are up 118.4% in one year. The Zacks Consensus Estimate for fiscal income for 2021 has been stable for the past 30 days.
One year price performance
Image Source: Zacks Investment Research
Builders FirstSource, Inc. BLDR is a Dallas, TX based building materials supplier and manufacturer. The company is benefiting from increased demand for its integrated services, supported by an improved housing market and a shift to suburban living. This Zacks Rank #2 company has been active on the acquisition front, supporting revenue. It also focuses on cost control practices. The Zacks Consensus Estimate for 2021 has been stable for the past 30 days. Impressively, the stock is up about 126.2% over the past year.
Investors may also consider investing in Fastenal Company FAST. This Winona, MN-based wholesale distributor of industrial and construction products benefits from the installation of breakers. Furthermore, this Zacks Rank #2 company aims to increase its portfolio of onsite locations. The company has also taken prudent cost containment measures to ease the pressure from rising operating costs. Fastenal is also working to expand its e-commerce presence. Notably, the share has increased by about 24.5% in a year. The Zacks Consensus Estimate for 2021 earnings has been stable for the past 30 days.
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