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5 Wood Industry Stocks to Buy on Booming Homebuilding Market
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The boom in the U.S. housing market is not only helping homebuilders but also the wood industry. Moreover, shortage in supply of wood due to the growing demand for new homes is also pushing up prices.
Needless to say, the Zacks Building Products – Wood industry is likely to benefit in the days to come as more people build homes, and repair and remodeling activity gains momentum.
Homebuilding Market Helping Wood Industry
A number of factors are helping the wood industry in the United States for quite some time now. One of the biggest factors is the resilient homebuilding market. Ever since the economy reopened, the homebuilding market has been on a tear with soaring demand for new homes.
Record low mortgage rates have been pushing people to buy new homes. This is simultaneously helping the wood industry. Wood as a building product is an integral part of the homebuilding sector.
The Commerce Department last month said that the sale of new single-family homes increased 1.6% in December to a seasonally annual rate of 842,000 units. On a year-over-year basis, new home sales increased 15.2%, with sales totaling 811,000 units in 2020, marking an increase of 18.8% from the prior year and hitting the highest level in more than a decade. This is a clear indication of the boom being witnessed in the homebuilding market.
Wood Industry on Growth Track
Besides solid growth in the homebuilding market, the wood industry is also benefiting from a flourishing repair and remodeling market. Despite the uncertainties arising from the COVID-19 pandemic, the repair and remodeling market has been doing well, thus increasing demand for lumber.
Housing demand has seen a shortage in lumber supply, which is further pushing prices. According to the National Association of Home Builders, soaring lumber prices are pushing up prices of new homes. Per a report in World Property Journal citing Random Lengths, lumber prices have been on the rise and hit a record high last week. Lumber price has rise more than 170% in the past 10 months. This once again shows the strength in the wood industry.
Our Choices
Given the boom in the homebuilding market, and a solid repair and remodeling market, demand for lumber will continue to rise irrespective of the growing cost. This thus makes sense to invest in the wood industry stocks now.
LouisianaPacific Corporation (LPX - Free Report) is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products as well as exterior siding for use in residential, industrial and light commercial construction.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 4.4% over the past 60 days. LouisianaPacific sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Potlatch Corporation (PCH - Free Report) a certified forest practices leader, is committed to providing superior returns to stockholders through long-term stewardship of its forest resources.
The company’s expected earnings growth rate for the current year is 10.5%. The Zacks Consensus Estimate for current-year earnings has improved 94.6% over the past 60 days. Potlatch Corporation sports a Zacks Rank #1.
Weyerhaeuser Company (WY - Free Report) is one of the leading U.S. forest product companies with operations primarily concentrated in Southern California, Nevada, Washington, Texas, Maryland and Virginia.
The company’s expected earnings growth rate for the current year is 28.7%. The Zacks Consensus Estimate for current-year earnings has improved 76.6% over the past 60 days. Weyerhaeuser Company has a Zacks Rank #1.
Masonite International Corporation (DOOR - Free Report) is a designer and manufacturer of interior and exterior doors. It offers residential molded, flush, stile and rail, louvre and specially ordered commercial and architectural doors and exterior residential steel, fiberglass, wood doors and entry systems.
The company’s expected earnings growth rate for the current year is 65%. The Zacks Consensus Estimate for current-year earnings has improved 0.67% over the past 60 days. Masonite International carries a Zacks Rank #2 (Buy).
Boise Cascade, L.L.C. (BCC - Free Report) manufactures engineered wood products, plywood, lumber and particleboard and distributes a variety of wood products.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 4.1% over the past 60 days. Boise Cascade has a Zacks Rank #2.
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5 Wood Industry Stocks to Buy on Booming Homebuilding Market
The boom in the U.S. housing market is not only helping homebuilders but also the wood industry. Moreover, shortage in supply of wood due to the growing demand for new homes is also pushing up prices.
Needless to say, the Zacks Building Products – Wood industry is likely to benefit in the days to come as more people build homes, and repair and remodeling activity gains momentum.
Homebuilding Market Helping Wood Industry
A number of factors are helping the wood industry in the United States for quite some time now. One of the biggest factors is the resilient homebuilding market. Ever since the economy reopened, the homebuilding market has been on a tear with soaring demand for new homes.
Record low mortgage rates have been pushing people to buy new homes. This is simultaneously helping the wood industry. Wood as a building product is an integral part of the homebuilding sector.
The Commerce Department last month said that the sale of new single-family homes increased 1.6% in December to a seasonally annual rate of 842,000 units. On a year-over-year basis, new home sales increased 15.2%, with sales totaling 811,000 units in 2020, marking an increase of 18.8% from the prior year and hitting the highest level in more than a decade. This is a clear indication of the boom being witnessed in the homebuilding market.
Wood Industry on Growth Track
Besides solid growth in the homebuilding market, the wood industry is also benefiting from a flourishing repair and remodeling market. Despite the uncertainties arising from the COVID-19 pandemic, the repair and remodeling market has been doing well, thus increasing demand for lumber.
Housing demand has seen a shortage in lumber supply, which is further pushing prices. According to the National Association of Home Builders, soaring lumber prices are pushing up prices of new homes. Per a report in World Property Journal citing Random Lengths, lumber prices have been on the rise and hit a record high last week. Lumber price has rise more than 170% in the past 10 months. This once again shows the strength in the wood industry.
Our Choices
Given the boom in the homebuilding market, and a solid repair and remodeling market, demand for lumber will continue to rise irrespective of the growing cost. This thus makes sense to invest in the wood industry stocks now.
LouisianaPacific Corporation (LPX - Free Report) is a leading manufacturer of sustainable, quality engineered wood building materials, structural framing products as well as exterior siding for use in residential, industrial and light commercial construction.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 4.4% over the past 60 days. LouisianaPacific sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Potlatch Corporation (PCH - Free Report) a certified forest practices leader, is committed to providing superior returns to stockholders through long-term stewardship of its forest resources.
The company’s expected earnings growth rate for the current year is 10.5%. The Zacks Consensus Estimate for current-year earnings has improved 94.6% over the past 60 days. Potlatch Corporation sports a Zacks Rank #1.
Weyerhaeuser Company (WY - Free Report) is one of the leading U.S. forest product companies with operations primarily concentrated in Southern California, Nevada, Washington, Texas, Maryland and Virginia.
The company’s expected earnings growth rate for the current year is 28.7%. The Zacks Consensus Estimate for current-year earnings has improved 76.6% over the past 60 days. Weyerhaeuser Company has a Zacks Rank #1.
Masonite International Corporation (DOOR - Free Report) is a designer and manufacturer of interior and exterior doors. It offers residential molded, flush, stile and rail, louvre and specially ordered commercial and architectural doors and exterior residential steel, fiberglass, wood doors and entry systems.
The company’s expected earnings growth rate for the current year is 65%. The Zacks Consensus Estimate for current-year earnings has improved 0.67% over the past 60 days. Masonite International carries a Zacks Rank #2 (Buy).
Boise Cascade, L.L.C. (BCC - Free Report) manufactures engineered wood products, plywood, lumber and particleboard and distributes a variety of wood products.
The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 4.1% over the past 60 days. Boise Cascade has a Zacks Rank #2.
Legal Marijuana: An Investor’s Dream
Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.
Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.
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