The best home improvement stocks in the market to watch for in 2021.
While staying at home all the time, people have had a new hobby; how to renovate or upgrade their homes. With nothing much to do, there has been a surge of interest among consumers in home improvement projects.
Home improvement seems to have become a priority for consumers. That’s the reason why the home improvement firms were one of the biggest gainers during the pandemic. But what would happen once the pandemic ends?
Let’s have a look at the three best home improvement stocks that have a strong long-term prospect.
Home Depot (HD)
Home Depot (HD) is one of the biggest home improvement enterprise in the market, with over 2,200 Home Depot stores across the U.S., Canada, and Mexico. HD stock made thriving progress in the past year—thanks to the increase in sales.
During the pandemic period last year, the company added more than $15 billion to its sales base and made sky-touching profits during the first nine months of 2020. The outlook for Home Depot is bright as we head forward. While vaccine development is still underway there is a way to go before things could turn to normal. So, there is still substantial for home improvement to maintain sequential growth.
Moreover, Home Depot’s fundamental track record is quite astonishing. The company’s EPS has soared up to 4% from $2.03 in 2011 to $10.25 in 2020. The double-digit growth shows that Home Depot’s demand has surged massively and should lift the business well enough in 2021.
Wayfair (W) is one of the world’s leading online destination for the home. The significance of Wayfair has grown with the pandemic and the evolution of the digital world. The company is well-established and its business model makes it a long-term stock.
In the third quarter of 2020, the company reported net revenue of $3.8 billion, popping up to 66.5% year-over-year. While the US net revenue soared $1.3 billion, also up by 66.5% YoY. The global net revenues jumped $225.9 million, with a 66.7% growth. And, the gross profit was around $1.1 billion.
The company is set to release the Q4 and full-year 2020 results on Feb. 25, 2021. The quarterly results are expected to report high revenue to due more demand for renovations in the holiday season.
The CEO of Niraj Shah stated that their long-term goal and strategic investments in merchandising, selection, service, and delivery across North America and Europe would continue sustained profitability. This would help in positive free cash flow generation in the coming quarters. So, with long-term plans, Mayfair (W) is set to grow its market value—ultimately pushing the stock price.
Builders FirstSource (BLDR)
Builders FirstSource (BLDR) is a Dallas-based Fortune 500 company that manufactures and supplies building materials. The company has been doing great in the recent past—driven by the pandemic boost.
BLDR stock has made notable growth since the lockdown period, soaring from $10.91 on March 30, 2020, to $43.48 on Jan. 18, 2021. BLDR shares closed the session on Feb. 1 at $39.42.
Based on the firm’s continuous earnings consensus beat, Zacks expect the company to cross earnings estimate in yet another quarter. Builders FirstSource has scheduled to release the Q4 and full-year 2020 results on Feb. 26. The construction supply company has seen a continuous beat in earnings estimate—popping up by an average surprise of 89.15% in the past two quarters.
In Q3 2020, the company reported net sales of $2.3 billion, up by almost 15.9% YoY. While the basic organic sales soared over 6.7%. The accusations—which the company made in the past year—accounted for a total contribution of 2% in net sales. The gross margin increased up to $29.5 million, totaling $570.7 million during the quarter.
As per Zacks, the company has an Earnings ESP of +1.93%, as of now. This shows that the analysts have a bullish sentiment on the construction supply firm. Builders FirstSource (BLDR) is making good progress and is set to make good moves this year.