The COVID-19 pandemic has radically altered our lifestyle in 2020, making stay-at-home and social distancing practices the new normal. With more time being spent indoors, there has been an increasing focus on making homes well equipped for work-from-home, remote schooling and entertainment needs. As a result, home renovation and maintenance projects were widely undertaken. This certainly played out as an upside for players in the home improvements space.
However, the scenario for 2021 is likely to be different. With vaccinations in sight and individuals spending more time outdoors for work and entertainment needs, focus on home-renovation works are likely to subside. Nevertheless, experts stated that not all pandemic-led favorable impacts will fade. They believe that work-from-home practices are likely to remain a prominent feature in 2021 as well. Moreover, the pandemic-induced habits of keeping homes well-maintained are likely to stay. Such practices are likely to keep favoring the demand for home improvement products.
Additionally, home improvement retailers are likely to continue benefitting from rapid urbanization trends. Also, the demand for products that cater to DIY (do-it-yourself) projects is likely to stay high. These include tools and products related to gardening and painting as well as minor maintenance and repair works.
Also, companies have been ramping up omni-channel offerings owing to consumers’ inclination toward online transactions. As a result, players in the home improvements arena are boosting online ordering and delivery capabilities. The companies are also striving to boost the availability of online assortments. Such trends are likely to continue next year and thereby drive the performance of key players.
One-Year Price Performance
4 Stocks in Focus
With the scenario looking bright for the home improvements industry, investors may consider keeping an eye on stocks from this space. We have highlighted four such companies, who are gaining from the favorable trends in the market and are adopting well-chalked practices to stay afloat.
First on our list is Beacon Roofing Supply, Inc. BECN. This roofing materials distributor is gaining from improved demand for residential products. Moreover, its efforts to boost technology infrastructure has been supporting growth witnessed in the e-commerce platform. Additionally, its new OTC (On-Time and Complete) Delivery Network and newly-designed website are driving in-store and online customers with enhanced product availability, delivery tracking and notifications. The company, which currently flaunts a Zacks Rank #1 (Strong Buy), is committed toward cost-management efforts. The Zacks Consensus Estimate for fiscal 2021 earnings moved up 20.7% in the past 30 days. Shares of the company have gained 26.3% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Builders FirstSource, Inc. BLDR is a Dallas, TX-based supplier and manufacturer of building materials. The company is gaining from higher demand for its integrated services, backed by improved housing market and shift to suburban living. This Zacks Rank #2 (Buy) company has been active on the acquisition front, which is supporting the top line. It is also engaged in disciplined cost-management practices. The Zacks Consensus Estimate for 2021 earnings have been revised up 8.4% in the past 30 days. Impressively, the stock has rallied about 40% in the past year.
Lowe’s Companies Inc. LOW is a leading home improvements retailer based in Mooresville, NC. The company is gaining from its sturdy U.S. home-improvement business along with advancements in the digital channel. The company is working toward boosting contactless delivery operations and plans to install self-service pickup lockers across stores in 2021. It is undertaking measures to boost sales to pro customers and augmenting pro-focused brands. Shares of this Zacks Rank #3 (Hold) company have rallied 33.4% in the past year. The Zacks Consensus Estimate for fiscal 2021 earnings improved 5.8% in the past 30 days.
The Home Depot, Inc. HD is another potential pick. This home improvement retailer follows a flexible interconnected infrastructure, which helped it quickly adapt to changing customer preferences. This Zacks Rank #3 company is gaining from broad-based strength across stores and geographies as well as growing presence in the digital arena. The company is working toward boosting omni-channel functions such as curbside pickup and buy online pickup in store services with convenient pickup lockers. Impressively, the stock has rallied about 23.3% in the past year. The Zacks Consensus Estimate for fiscal 2021 earnings has improved 2.4% in the past 30 days.
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.
Download Marijuana Moneymakers FREE >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Home Depot, Inc. (HD) : Free Stock Analysis Report
Lowes Companies, Inc. (LOW) : Free Stock Analysis Report
Beacon Roofing Supply, Inc. (BECN) : Free Stock Analysis Report
Builders FirstSource, Inc. (BLDR) : Free Stock Analysis Report
To read this article on Zacks.com click here.