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The Zacks Analyst Blog Highlights: KB Home, Century Communities, Beazer Homes, D.R. Horton and M.D.C. Holdings

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Zacks Equity Research
·6 min read
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For Immediate Release

Chicago, IL – March 1, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: KB Home KBH, Century Communities, Inc. CCS, Beazer Homes USA, Inc. BZH, D.R. Horton, Inc. DHI and M.D.C. Holdings, Inc. MDC.

Here are highlights from Friday’s Analyst Blog:

New Home Sales Jump in January: 5 Solid Stocks to Buy

The U.S. homebuilding market was on a high last year and the trend continues. New home sales increased for the second straight month in January 2021, the Commerce Department said on Feb 24.

The news comes just days after the National Association of Realtors said that existing home sales jumped 0.6% in January. While new homes have been enjoying high demand, prices too are skyrocketing. Moreover, a low mortgage rate is helping the homebuilding industry and the scene is likely to stay so in the coming months too.

New Home Sales Rise in January

The Commerce Department reported that new home sales increased 4.3% month over monthto a seasonally adjusted annual rate of 923,000 units in January. This is the second straight month of increase. In December, new home sales jumped 5.5% month over monthto a revised rate of 885,000 units. On a year-over-year basis, new home sales jumped 19.3% in January. 

The median new house price jumped 5.3% to $346,400 on a year-over-year basis in January. The homebuilding market has been doing well ever since the economy reopened. The January sales were driven by higher sales in the Midwest and West. New home sales increased 12.6% to an annual rate of 107,000 in the Midwest, while it jumped 6.8% in the West to an annual rate of 307,000.

Low Mortgage Rate, Other Factors Helping Homebuilding Market

The jump in new home sales comes just days after the National Association of Realtors said that existing home sales increased 0.6% month over month in January to a seasonally adjusted annual rate of 6.69 million units after increasing 0.9% month over monthin December to 6.65 million units. Record low mortgage rates are making buyers flock to the markets, which has been helping the homebuilding market. And the rates are likely to stay low for some time.  

Understandably, people don’t want to let go of this opportunity and are rushing to buy homes. This at the same time is also resulting in a supply crunch, which is pushing up home prices. Interestingly, the rise comes despite a decline in housing starts in January, albeit after a gap of five months.

Also, the pandemic saw many leave big cities and shift to smaller towns and suburbs that helped sales of homes. There were already fewer homes to meet demand before the pandemic, and now fewer homeowners are willing to list their homes for sale, which is further helping home prices.

Our Choices

A record-low mortgage rate coupled with a jump in consumer confidence in January is likely to help the homebuilding market in the near term. This thus makes for an opportune time to invest in homebuilding stocks.

KB Home is a well-known homebuilder in the United States. The company’s Homebuilding operations include building and designing homes that cater to first-time, move-up and active adult homebuyers on acquired or developed lands.

The company’s expected earnings growth rate for next year is 63.3%. The Zacks Consensus Estimate for current-year earnings has improved 19.7% over the past 60 days.  The company carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Century Communities is a home building and construction company. Its activities comprise land acquisition, development and entitlements; and the acquisition, development, construction, marketing, and sale of various single-family detached and attached residential home projects. 

The company’s expected earnings growth rate for the current year is 33.8%. The Zacks Consensus Estimate for current-year earnings has improved 38.2% over the past 60 days. Century Communities sports a Zacks Rank #1.

Beazer Homes designs, builds and sells single-family homes. The company designs homes to appeal primarily to entry-level and first move-up home buyers. 

The company’s expected earnings growth rate for the current year is 16.4%. The Zacks Consensus Estimate for current-year earnings has improved 46.6% over the past 60 days. The company has a Zacks Rank #1.

D.R. Horton is one of the leading national homebuilders, primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets.

The company’s expected earnings growth rate for next year is 41%. The Zacks Consensus Estimate for current-year earnings has improved 14.1% over the past 60 days. The company has a Zacks Rank #2 (Buy).

M.D.C. Holdings engages in homebuilding and financial service businesses in the United States. It is engaged in the construction, sale and related financing of residential housing and the acquisition and development of land for use in Denver, Phoenix, Maryland, Virginia, mid-Atlantic region, Las Vegas, Dallas and California metropolitan areas. 

The company’s expected earnings growth rate for the current year is 34.8%. The Zacks Consensus Estimate for current-year earnings has improved 20.3% over the past 60 days. The company carries a Zacks Rank #2.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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KB Home (KBH) : Free Stock Analysis Report
 
Beazer Homes USA, Inc. (BZH) : Free Stock Analysis Report
 
Century Communities, Inc. (CCS) : Free Stock Analysis Report
 
D.R. Horton, Inc. (DHI) : Free Stock Analysis Report
 
M.D.C. Holdings, Inc. (MDC) : Free Stock Analysis Report
 
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