For those looking to find strong Construction stocks, it is prudent to search for companies in the group that are outperforming their peers. Meritage Homes (MTH - Free Report) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? One simple way to answer this question is to take a look at the year-to-date performance of MTH and the rest of the Construction group's stocks.
Meritage Homes is a member of the Construction sector. This group includes 101 individual stocks and currently holds a Zacks Sector Rank of #1. 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 is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. MTH is currently sporting a Zacks Rank of #1 (Strong Buy).
The Zacks Consensus Estimate for MTH's full-year earnings has moved 67.60% higher within the past quarter. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.
Based on the latest available data, MTH has gained about 62.77% so far this year. Meanwhile, stocks in the Construction group have gained about 10.39% on average. This means that Meritage Homes is outperforming the sector as a whole this year.
Breaking things down more, MTH is a member of the Building Products - Home Builders industry, which includes 16 individual companies and currently sits at #2 in the Zacks Industry Rank. Stocks in this group have gained about 28.23% so far this year, so MTH is performing better this group in terms of year-to-date returns.
Going forward, investors interested in Construction stocks should continue to pay close attention to MTH as it looks to continue its solid performance.