Is KB Home (KBH) Outperforming Other Construction Stocks This Year?
For those looking to find strong Construction stocks, it is prudent to search for companies in the group that are outperforming their peers. KB Home (KBH) 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? A quick glance at the company's year-to-date performance in comparison to the rest of the Construction sector should help us answer this question.
KB Home is one of 103 individual stocks in the Construction sector. Collectively, these companies sit at #9 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different sector groups. The average Zacks Rank of the individual stocks within the groups is measured, and the sectors are listed from best to worst.
The Zacks Rank emphasizes earnings estimates and estimate revisions to find stocks with improving earnings outlooks. This system has a long record of success, and these stocks tend to be on track to beat the market over the next one to three months. KB Home is currently sporting a Zacks Rank of #2 (Buy).
Over the past three months, the Zacks Consensus Estimate for KBH's full-year earnings has moved 12.5% higher. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.
Based on the most recent data, KBH has returned 32.2% so far this year. Meanwhile, the Construction sector has returned an average of 28.6% on a year-to-date basis. This shows that KB Home is outperforming its peers so far this year.
Another stock in the Construction sector, Tri Pointe Homes (TPH), has outperformed the sector so far this year. The stock's year-to-date return is 57.7%.
The consensus estimate for Tri Pointe Homes' current year EPS has increased 8.1% over the past three months. The stock currently has a Zacks Rank #1 (Strong Buy).
Looking more specifically, KB Home belongs to the Building Products - Home Builders industry, which includes 19 individual stocks and currently sits at #73 in the Zacks Industry Rank. Stocks in this group have gained about 34.7% so far this year, so KBH is slightly underperforming its industry this group in terms of year-to-date returns. Tri Pointe Homes is also part of the same industry.
Investors with an interest in Construction stocks should continue to track KB Home and Tri Pointe Homes. These stocks will be looking to continue their solid performance.
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