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Are Construction Stocks Lagging Toll Brothers (TOL) This Year?
The Construction group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Toll Brothers (TOL - 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? Let's take a closer look at the stock's year-to-date performance to find out.
Toll Brothers is one of 99 individual stocks in the Construction sector. Collectively, these companies sit at #16 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 is a proven system that emphasizes earnings estimates and estimate revisions, highlighting a variety of stocks that are displaying the right characteristics to beat the market over the next one to three months. Toll Brothers is currently sporting a Zacks Rank of #2 (Buy).
Over the past three months, the Zacks Consensus Estimate for TOL's full-year earnings has moved 2.3% higher. This means that analyst sentiment is stronger and the stock's earnings outlook is improving.
Our latest available data shows that TOL has returned about 12.3% since the start of the calendar year. At the same time, Construction stocks have lost an average of 16.2%. This means that Toll Brothers is performing better than its sector in terms of year-to-date returns.
Another Construction stock, which has outperformed the sector so far this year, is United Rentals (URI - Free Report) . The stock has returned 10.3% year-to-date.
In United Rentals' case, the consensus EPS estimate for the current year increased 6.6% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).
Looking more specifically, Toll Brothers belongs to the Building Products - Home Builders industry, a group that includes 20 individual stocks and currently sits at #216 in the Zacks Industry Rank. Stocks in this group have lost about 14.9% so far this year, so TOL is performing better this group in terms of year-to-date returns.
On the other hand, United Rentals belongs to the Building Products - Miscellaneous industry. This 27-stock industry is currently ranked #172. The industry has moved -16.7% year to date.
Going forward, investors interested in Construction stocks should continue to pay close attention to Toll Brothers and United Rentals as they could maintain their solid performance.