Back to top

Image: Bigstock

The Zacks Analyst Blog Highlights: Beazer Homes, Century Communities, KB Home, D.R. Horton and Toll Brothers

Read MoreHide Full Article

For Immediate Release

Chicago, IL – March 3, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Beazer Homes USA, Inc. (BZH - Free Report) , Century Communities, Inc. (CCS - Free Report) , KB Home (KBH - Free Report) , D.R. Horton, Inc. (DHI - Free Report) and Toll Brothers Inc. (TOL - Free Report) .

Here are highlights from Tuesday’s Analyst Blog:

Construction Spending Hits All-Time High: 5 Winners

Spending on construction projects in the United States hit a record high in January as new home sales continued to drive the sector. Per the latest data released by the Commerce Department on Mar 1, construction spending increased 1.7% in January.

Although the economy was battered for more than a year due to the COVID-19 pandemic, record low mortgage rates led to elevated demand and sales of single-family homes. Interestingly, the rise in spending was witnessed in both private and public sector unlike in December.

Construction Spending Hits Record High

The Commerce Department said on Mar 1 that construction spending jumped a solid 1.7% in January to $1.521 trillion. This is the highest level since the government began tracking the series in 2002. The gains in January follow a 1.1% rise in December instead of 1% as previously reported.

Moreover, construction spending increased 5.8% on a year-over-year basis in January, thus once again proving that people are showing faith in the economy.

January's gains were driven by increased spending on private projects such as homebuilding, which grew a robust 2.5%. Spending on non-residential construction like oil well and gas drilling increased 0.4%. Construction spending on private projects increased 1.7% in January after rising 1.5% and 1.2% in November and December, respectively. Spending on government projects jumped a solid 6.8% in January.

Homebuilding Industry Driving Construction Spending

The Commerce Department said that spending on residential construction increased 2.5% in January following a 3.8% increase in the prior month. Spending on single-family home construction increased 3%.

Last week, the Commerce Department had reported that new home sales increased 4.3% in January on a month-over-month basis and 19.3% on a year-over-year basis. In a separate report, the government stated that applications for building permits increased a robust 10.4% in January.

A record low mortgage rate is helping the homebuilding industry that has seen a surge in demand for single-family homes. Another reason behind the drive in private residential construction spending is the falling inventory of existing homes, as supply is trying to catch up with demand.

Our Choices

Demand for new homes in the United States has been on the rise owing to record low mortgage rates. Private residential construction spending has also picked up in order to cater to the escalating demand for new homes, thus making for the right opportunity to invest in homebuilding stocks.

Beazer Homes designs, builds and sells single-family homes. The company designs homes to appeal primarily to entry-level and first move-up home buyers. 

The company's expected earnings growth rate for the current year is 16.4%. The Zacks Consensus Estimate for current-year earnings has improved 20.8% over the past 30 days. The company has a Zacks Rank #2 (Buy).

Century Communities is a home building and construction company. Its activities comprise land acquisition, development and entitlements; and the acquisition, development, construction, marketing, and sale of various single-family detached and attached residential home projects. 

The company's expected earnings growth rate for the current year is 33.8%. The Zacks Consensus Estimate for current-year earnings has improved 31.9% over the past 30 days. Century Communities sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

KB Home is a well-known homebuilder in the United States. The company's Homebuilding operations include building and designing homes that cater to first-time, move-up and active adult homebuyers on acquired or developed lands.

The company's expected earnings growth rate for next year is 63.3%. The Zacks Consensus Estimate for current-year earnings has improved 19.7% over the past 60 days.  The company carries a Zacks Rank #2.

D.R. Horton is one of the leading national homebuilders, primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets.

The company's expected earnings growth rate for thenext year is 41%. The Zacks Consensus Estimate for current-year earnings has improved 2.8% over the past 30 days. The company has a Zacks Rank #2.

Toll Brothers builds single-family detached and attached home communities; master planned luxury residential resort-style golf communities; and urban low, mid, and high-rise communities, principally on the land it develops and improves.

The company's expected earnings growth rate for thenext year is 45.9%. The Zacks Consensus Estimate for current-year earnings has improved 8.3% over the past 30 days. The company carries a Zacks Rank #2.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?

Last year's 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don't miss your chance to get in on these long-term buys.

Access Zacks Top 10 Stocks for 2021 today >>

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com                                      

https://www.zacks.com                                          

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Published in