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M/I Homes (MHO) Hits 52-Week High: What's Driving It?
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M/I Homes, Inc. (MHO - Free Report) crafts a new 52-week high of $82.81 on Jun 23, 2023. The stock pulled back to end the trading session at $81.55.
Shares of this Zacks Rank #1 (Strong Buy) company have gained 76.6% year to date, outperforming the Zacks Building Products - Home Builders industry’s 43.4% rally. The stock has fared better than the Zacks Construction sector and the S&P 500 Index’s 23.6% and 14.4% rallies, respectively.
The price surge was probably due to the news related to the new residential construction sector that demonstrated positive growth across various metrics. Building permits, housing starts, and housing completions all showed encouraging signs. Along with that, KB Home’s (KBH - Free Report) better-than-expected results for second-quarter fiscal 2023 (ended May 31, 2023) and upbeat views might have triggered optimism for investors.
Image Source: Zacks Investment Research
Notably, MHO’s earnings estimates for 2023 have moved north to $12.40 per share from $11.12 over the past 60 days, depicting analysts’ optimism over the company’s prospects. This bullish trend justifies the stock’s addition to investors’ portfolios. Again, it carries an impressive VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
Will the Bull Run Continue?
Improving Residential Construction Market Statistics: Builders are now cautiously optimistic for 2023 as the lack of existing inventory is shifting demand to the new home market. Builder confidence in the market for newly-built single-family homes inched up five points in June to 55 from May, according to the National Association of Home Builders /Wells Fargo Housing Market Index. This marks the sixth month in a row of confidence increase and the first time that the index has touched 50 since July 2022 despite headwinds like persistent shortage of skilled labor and tight credit market that continue to vex builders.
Also, the latest data related to building permits, housing starts, and housing completions indicate an encouraging real estate market. Building permits for privately-owned housing units authorized in May represented a 5.2% increase from the revised April 2023 rate. However, the May 2023 figure is still 12.7% below the May 2022 level, according to the latest report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Housing starts in May registered 21.7% growth from the revised April estimate. Furthermore, it represents a 5.7% rise from the year-ago level. Housing completions also displayed a 9.5% increase from the revised April estimate and a 5% rise from the year-ago period.
The U.S. new residential construction market has been riding high, given the strong demand for homes, the lack of existing homes for sale, the growing population and favorable demographics.
Diverse Offerings: Based in Columbus, OH, M/I Homes is one of the nation's leading builders of single-family homes. The company designs, markets, constructs and sells single-family homes and attached townhomes to first-time, millennial, move-up, empty-nester and luxury buyers under the M/I Homes brand name.
Owing to this tailwind, the company has been benefiting, which is reflected in the homes closed. In the first quarter of 2023, homes delivered increased 10% to 2,007 homes. M/I Homes had 200 communities on Mar 31, 2023, compared to 176 communities on Mar 31, 2022.
MHO increased first-quarter 2023 revenues by 16% to a record $1 billion, increased pre-tax income by 11% to $136 million and delivered 2,007 homes. In addition, quarterly results reflect a 50-basis point improvement in the overhead expense ratio.
Higher Return on Equity (ROE): The company’s trailing 12-month ROE is 25.8%, higher than the industry’s 21.1%. This implies that the company is getting more efficient at creating profits and increasing shareholders’ value with respect to its industry.
Other Key Picks
Here are some other top-ranked stocks that investors may consider from the same industry:
PulteGroup Inc. (PHM - Free Report) : The company has been reaping benefits from the successful execution of strategic initiatives to boost profitability, with a focus on entry-level homes. PulteGroup, presently sports a Zacks Rank #1, has jumped 67.6% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for its 2023 and 2024 earnings has been upwardly revised by 1.9% and 1.8%, respectively, over the past 30 days. Its earnings topped consensus estimates in three of the trailing four quarters and missed once, with the average surprise being 15.6%. Again, it carries an impressive VGM Score of A. This helps to identify stocks with the most attractive value, growth and momentum.
Toll Brothers (TOL - Free Report) : Based in Horsham, PA, this leading builder of luxury homes has gained 52.5% this year.
TOL currently sports a Zacks Rank #1. Earnings estimates for fiscal 2023 have increased to $10.61 per share from $8.66 per share over the past 30 days. The company’s earnings topped the Zacks Consensus Estimate in all the trailing four quarters, the average being 24.4%. Again, it carries an impressive VGM Score of B.
KBH’s Q2 Release
KB Home reported better-than-expected results for second-quarter fiscal 2023 (ended May 31, 2023). Both earnings and revenues beat the Zacks Consensus Estimate. The company’s earnings and revenues surpassed the consensus mark in two consecutive quarters.
Pertaining to the quarterly results, Jeffrey Mezger, chairman, president and chief executive officer, stated, “The improvement in demand we started to see in February was sustained throughout our second quarter, as we achieved monthly sequential increases in our net orders, resulting in an overall absorption pace of 5.2 net orders per month, per community.”
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M/I Homes (MHO) Hits 52-Week High: What's Driving It?
M/I Homes, Inc. (MHO - Free Report) crafts a new 52-week high of $82.81 on Jun 23, 2023. The stock pulled back to end the trading session at $81.55.
Shares of this Zacks Rank #1 (Strong Buy) company have gained 76.6% year to date, outperforming the Zacks Building Products - Home Builders industry’s 43.4% rally. The stock has fared better than the Zacks Construction sector and the S&P 500 Index’s 23.6% and 14.4% rallies, respectively.
The price surge was probably due to the news related to the new residential construction sector that demonstrated positive growth across various metrics. Building permits, housing starts, and housing completions all showed encouraging signs. Along with that, KB Home’s (KBH - Free Report) better-than-expected results for second-quarter fiscal 2023 (ended May 31, 2023) and upbeat views might have triggered optimism for investors.
Image Source: Zacks Investment Research
Notably, MHO’s earnings estimates for 2023 have moved north to $12.40 per share from $11.12 over the past 60 days, depicting analysts’ optimism over the company’s prospects. This bullish trend justifies the stock’s addition to investors’ portfolios. Again, it carries an impressive VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
Will the Bull Run Continue?
Improving Residential Construction Market Statistics: Builders are now cautiously optimistic for 2023 as the lack of existing inventory is shifting demand to the new home market. Builder confidence in the market for newly-built single-family homes inched up five points in June to 55 from May, according to the National Association of Home Builders /Wells Fargo Housing Market Index. This marks the sixth month in a row of confidence increase and the first time that the index has touched 50 since July 2022 despite headwinds like persistent shortage of skilled labor and tight credit market that continue to vex builders.
Also, the latest data related to building permits, housing starts, and housing completions indicate an encouraging real estate market. Building permits for privately-owned housing units authorized in May represented a 5.2% increase from the revised April 2023 rate. However, the May 2023 figure is still 12.7% below the May 2022 level, according to the latest report from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development.
Housing starts in May registered 21.7% growth from the revised April estimate. Furthermore, it represents a 5.7% rise from the year-ago level. Housing completions also displayed a 9.5% increase from the revised April estimate and a 5% rise from the year-ago period.
The U.S. new residential construction market has been riding high, given the strong demand for homes, the lack of existing homes for sale, the growing population and favorable demographics.
Diverse Offerings: Based in Columbus, OH, M/I Homes is one of the nation's leading builders of single-family homes. The company designs, markets, constructs and sells single-family homes and attached townhomes to first-time, millennial, move-up, empty-nester and luxury buyers under the M/I Homes brand name.
Owing to this tailwind, the company has been benefiting, which is reflected in the homes closed. In the first quarter of 2023, homes delivered increased 10% to 2,007 homes. M/I Homes had 200 communities on Mar 31, 2023, compared to 176 communities on Mar 31, 2022.
MHO increased first-quarter 2023 revenues by 16% to a record $1 billion, increased pre-tax income by 11% to $136 million and delivered 2,007 homes. In addition, quarterly results reflect a 50-basis point improvement in the overhead expense ratio.
Higher Return on Equity (ROE): The company’s trailing 12-month ROE is 25.8%, higher than the industry’s 21.1%. This implies that the company is getting more efficient at creating profits and increasing shareholders’ value with respect to its industry.
Other Key Picks
Here are some other top-ranked stocks that investors may consider from the same industry:
PulteGroup Inc. (PHM - Free Report) : The company has been reaping benefits from the successful execution of strategic initiatives to boost profitability, with a focus on entry-level homes. PulteGroup, presently sports a Zacks Rank #1, has jumped 67.6% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for its 2023 and 2024 earnings has been upwardly revised by 1.9% and 1.8%, respectively, over the past 30 days. Its earnings topped consensus estimates in three of the trailing four quarters and missed once, with the average surprise being 15.6%. Again, it carries an impressive VGM Score of A. This helps to identify stocks with the most attractive value, growth and momentum.
Toll Brothers (TOL - Free Report) : Based in Horsham, PA, this leading builder of luxury homes has gained 52.5% this year.
TOL currently sports a Zacks Rank #1. Earnings estimates for fiscal 2023 have increased to $10.61 per share from $8.66 per share over the past 30 days. The company’s earnings topped the Zacks Consensus Estimate in all the trailing four quarters, the average being 24.4%. Again, it carries an impressive VGM Score of B.
KBH’s Q2 Release
KB Home reported better-than-expected results for second-quarter fiscal 2023 (ended May 31, 2023). Both earnings and revenues beat the Zacks Consensus Estimate. The company’s earnings and revenues surpassed the consensus mark in two consecutive quarters.
Pertaining to the quarterly results, Jeffrey Mezger, chairman, president and chief executive officer, stated, “The improvement in demand we started to see in February was sustained throughout our second quarter, as we achieved monthly sequential increases in our net orders, resulting in an overall absorption pace of 5.2 net orders per month, per community.”