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Don't Overlook These 3 Top-Ranked Construction Stocks
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Targeting areas of the market that are seeing positive earnings estimate revisions is an excellent way for investors to insert themselves in favorable trends.
That’s precisely what the Zacks Construction sector has witnessed as of late, helping push it into the #1 spot out of all 16 Zacks sectors. The sector has visibly outpaced the S&P 500 in June, up nearly 8% compared to the S&P 500’s 2.8% gain.
Three stocks – North American Construction Group (NOA - Free Report) , D.R. Horton (DHI - Free Report) , and Toll Brothers (TOL - Free Report) – could all be considerations for those looking to tap into relative strength. Let’s take a closer look at each.
North American Construction Group
North American Construction Group provides heavy construction and mining services to large oil, natural gas, and resource companies. The stock sports a Zacks Rank #1 (Strong Buy).
The company’s 25.2% trailing twelve-month return on equity is worth highlighting, reflecting higher efficiency in generating profits from existing assets relative to peers.
Image Source: Zacks Investment Research
The company has consistently delivered better-than-expected results, exceeding the Zacks Consensus EPS Estimate by an average of 18% over its last four quarters. Just in its latest release, the company delivered an 18.4% EPS beat paired with a 12.5% revenue surprise.
D.R. Horton
D.R. Horton is a leading national homebuilder primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets. The stock boasts the highly-coveted Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
Shares aren’t stretched regarding valuation, with the current 10.1X forward earnings multiple sitting in line with the five-year median and well below the Zacks Construction sector average.
Image Source: Zacks Investment Research
Toll Brothers
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. The company’s earnings outlook has shifted positively across all timeframes, pushing the stock into a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
For those that seek income, TOL shares have that covered; the company’s shares presently yield 1.1% annually with a sustainable payout ratio sitting at 7% of its earnings. TOL has shown a commitment to increasingly rewarding its shareholders, boasting a 17% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Bottom Line
The Zacks Construction sector has seen near-term optimism from analysts as of late, helping land it into the #1 spot of all 16 Zacks sectors.
And for those looking to tap into the improved outlooks, all three stocks above – North American Construction Group (NOA - Free Report) , D.R. Horton (DHI - Free Report) , and Toll Brothers (TOL - Free Report) – could be considerations.
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Don't Overlook These 3 Top-Ranked Construction Stocks
Targeting areas of the market that are seeing positive earnings estimate revisions is an excellent way for investors to insert themselves in favorable trends.
That’s precisely what the Zacks Construction sector has witnessed as of late, helping push it into the #1 spot out of all 16 Zacks sectors. The sector has visibly outpaced the S&P 500 in June, up nearly 8% compared to the S&P 500’s 2.8% gain.
Three stocks – North American Construction Group (NOA - Free Report) , D.R. Horton (DHI - Free Report) , and Toll Brothers (TOL - Free Report) – could all be considerations for those looking to tap into relative strength. Let’s take a closer look at each.
North American Construction Group
North American Construction Group provides heavy construction and mining services to large oil, natural gas, and resource companies. The stock sports a Zacks Rank #1 (Strong Buy).
The company’s 25.2% trailing twelve-month return on equity is worth highlighting, reflecting higher efficiency in generating profits from existing assets relative to peers.
Image Source: Zacks Investment Research
The company has consistently delivered better-than-expected results, exceeding the Zacks Consensus EPS Estimate by an average of 18% over its last four quarters. Just in its latest release, the company delivered an 18.4% EPS beat paired with a 12.5% revenue surprise.
D.R. Horton
D.R. Horton is a leading national homebuilder primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets. The stock boasts the highly-coveted Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
Shares aren’t stretched regarding valuation, with the current 10.1X forward earnings multiple sitting in line with the five-year median and well below the Zacks Construction sector average.
Image Source: Zacks Investment Research
Toll Brothers
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. The company’s earnings outlook has shifted positively across all timeframes, pushing the stock into a Zacks Rank #1 (Strong Buy).
Image Source: Zacks Investment Research
For those that seek income, TOL shares have that covered; the company’s shares presently yield 1.1% annually with a sustainable payout ratio sitting at 7% of its earnings. TOL has shown a commitment to increasingly rewarding its shareholders, boasting a 17% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Bottom Line
The Zacks Construction sector has seen near-term optimism from analysts as of late, helping land it into the #1 spot of all 16 Zacks sectors.
And for those looking to tap into the improved outlooks, all three stocks above – North American Construction Group (NOA - Free Report) , D.R. Horton (DHI - Free Report) , and Toll Brothers (TOL - Free Report) – could be considerations.