We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Don't Ignore the Relative Strength of These 3 Homebuilders
Read MoreHide Full Article
Investors who target stocks displaying relative strength often find themselves in favorable trends, no matter the direction of the general market.
For a quick explanation, relative strength focuses on stocks or other assets that have performed well relative to the market as a whole or a relevant benchmark.
And in 2023, several homebuilders, including NVR (NVR - Free Report) , Lennar (LEN - Free Report) , and D.R. Horton (DHI - Free Report) , have all displayed relative strength, handily outperforming the general market. This is illustrated in the chart below.
Image Source: Zacks Investment Research
For those interested in tapping into the recent momentum, let’s take a closer look at each.
NVR
NVR is engaged in constructing and selling single-family detached homes, townhomes, and condominium buildings. Analysts have increased their earnings expectations across nearly all timeframes, helping land the stock into a favorable Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
NVR shares aren’t stretched regarding valuation, with the current 13.3X forward earnings multiple sitting well beneath the 15.1X five-year median and the Zacks Construction sector average.
The stock carries a Style Score of “B.”
Image Source: Zacks Investment Research
D.R. Horton
D.R. Horton is a leading national homebuilder primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets. The stock boasts the highly-coveted Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
The company posted a blowout quarter in its latest release, penciling in a 44% EPS beat. Quarterly revenue totaled $7.9 billion, 20% ahead of expectations and essentially flat from the year-ago period.
Impressively, the results reflected the company’s second consecutive quarter of posting a double-digit percentage EPS surprise.
Image Source: Zacks Investment Research
Lennar
Like the stocks above, analysts have recently become bullish on Lennar’s earnings outlook, with estimates increasing across all timeframes over the last 60 days. The stock is a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
For those with an appetite for income, LEN shares have that covered; the company’s annual dividend presently yields 1.4% with a sustainable payout ratio at 9% of earnings.
Undoubtedly a major highlight, LEN is committed to increasingly rewarding its shareholders, boasting a rock-solid 85% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Bottom Line
Targeting stocks displaying relative strength is an excellent way for investors to insert themselves in favorable market trends.
And in 2023, several homebuilders, including NVR (NVR - Free Report) , Lennar (LEN - Free Report) , and D.R. Horton (DHI - Free Report) , have all reflected relative strength, outperforming the general market handily.
In addition, all three sport a favorable Zacks Rank, indicating near-term optimism from analysts.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Don't Ignore the Relative Strength of These 3 Homebuilders
Investors who target stocks displaying relative strength often find themselves in favorable trends, no matter the direction of the general market.
For a quick explanation, relative strength focuses on stocks or other assets that have performed well relative to the market as a whole or a relevant benchmark.
And in 2023, several homebuilders, including NVR (NVR - Free Report) , Lennar (LEN - Free Report) , and D.R. Horton (DHI - Free Report) , have all displayed relative strength, handily outperforming the general market. This is illustrated in the chart below.
Image Source: Zacks Investment Research
For those interested in tapping into the recent momentum, let’s take a closer look at each.
NVR
NVR is engaged in constructing and selling single-family detached homes, townhomes, and condominium buildings. Analysts have increased their earnings expectations across nearly all timeframes, helping land the stock into a favorable Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
NVR shares aren’t stretched regarding valuation, with the current 13.3X forward earnings multiple sitting well beneath the 15.1X five-year median and the Zacks Construction sector average.
The stock carries a Style Score of “B.”
Image Source: Zacks Investment Research
D.R. Horton
D.R. Horton is a leading national homebuilder primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets. The stock boasts the highly-coveted Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
The company posted a blowout quarter in its latest release, penciling in a 44% EPS beat. Quarterly revenue totaled $7.9 billion, 20% ahead of expectations and essentially flat from the year-ago period.
Impressively, the results reflected the company’s second consecutive quarter of posting a double-digit percentage EPS surprise.
Image Source: Zacks Investment Research
Lennar
Like the stocks above, analysts have recently become bullish on Lennar’s earnings outlook, with estimates increasing across all timeframes over the last 60 days. The stock is a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
For those with an appetite for income, LEN shares have that covered; the company’s annual dividend presently yields 1.4% with a sustainable payout ratio at 9% of earnings.
Undoubtedly a major highlight, LEN is committed to increasingly rewarding its shareholders, boasting a rock-solid 85% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Bottom Line
Targeting stocks displaying relative strength is an excellent way for investors to insert themselves in favorable market trends.
And in 2023, several homebuilders, including NVR (NVR - Free Report) , Lennar (LEN - Free Report) , and D.R. Horton (DHI - Free Report) , have all reflected relative strength, outperforming the general market handily.
In addition, all three sport a favorable Zacks Rank, indicating near-term optimism from analysts.