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Is KB Home (KBH) Stock Outpacing Its Construction Peers This Year?

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The Construction group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Is KB Home (KBH - Free Report) one of those stocks right now? Let's take a closer look at the stock's year-to-date performance to find out.

KB Home is a member of our Construction group, which includes 96 different companies and currently sits at #2 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.

The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. KB Home is currently sporting a Zacks Rank of #1 (Strong Buy).

Over the past three months, the Zacks Consensus Estimate for KBH's full-year earnings has moved 27.3% higher. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.

Our latest available data shows that KBH has returned about 37.6% since the start of the calendar year. At the same time, Construction stocks have gained an average of 13.6%. This means that KB Home is outperforming the sector as a whole this year.

Another stock in the Construction sector, Meritage Homes (MTH - Free Report) , has outperformed the sector so far this year. The stock's year-to-date return is 28.1%.

In Meritage Homes' case, the consensus EPS estimate for the current year increased 18% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).

Looking more specifically, KB Home belongs to the Building Products - Home Builders industry, a group that includes 19 individual stocks and currently sits at #7 in the Zacks Industry Rank. Stocks in this group have gained about 28.2% so far this year, so KBH is performing better this group in terms of year-to-date returns. Meritage Homes is also part of the same industry.

KB Home and Meritage Homes could continue their solid performance, so investors interested in Construction stocks should continue to pay close attention to these stocks.


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