Investing in housing does not necessarily mean that you buy a house. There are different ways of investing in this industry. You can buy shares from homebuilder companies or invest in real estate trusts. However, when it comes to dealing with housing stocks, there is a wide range of options you have to choose from. Home improvement stocks come in different forms, and you must understand each if you want to make an investment. If you desire home improvement, you will come across various companies that supply everything their customers need. These companies experience certain growth and begin providing stock to their customers to enjoy returns in the future. With that said, read on to find out more about the five home improvement stocks you should know.
This is the largest and most effective home improvement company you might have come across. It is a home improvement retailer almost as big as Amazon and Walmart. The company generates about $108 million every year and has established almost 2,300 stores around North America. The company is a major supplier of construction items like tools, lumber, and other items used in construction.
Even though many investors show reluctance in investing in retail stocks due to many cases of store closure due to bankruptcy, it is not the same case with Home Depot. The company offers consumers and investors a chance to view what they do physically, considering that ordering for construction material does not normally happen online.
Thanks to homeowners doing renovations, Home Depot is able to make sales of up to 23.4% every year. The company has catered for the offline and online needs of consumers by giving them ease of access. This has encouraged buyers to buy more, and this is a big advantage for Home Depot and the stakeholders. With the 2.3% dividend, it makes sense to invest in Home Depot.
Since last year, shares from Lowe’s have hit almost 40%, and the rise has continued up to date. Just like Home Depot, Lowe’s deals with supplies for home improvement. You might want to renovate your bathroom, paint your living room or tile your kitchen. The truth is, at one point or another, you will need Lowe’s to supply the materials and items you need for the renovation. Lowe’s has established more than 2,300 stores across the US, Mexico, and Canada to cater to consumers’ home improvement needs. The stores are famous for selling items in different categories like building items, lawn and garden, appliances, lumber, plumbing, kitchen, HVAC, home décor, and more. Since 1946, Lowe’s has shown exponential growth and has become one of the best home improvement retailers in the US and Canada.
From the statistics, Lowe’s has reported a 30.1% increase in its sales and a whopping 75% increase in shares. The 1.47% dividend has lured in more investors who are more than excited by what Lowe’s is bringing and what the future holds.
NVR deals with home building, and it is a group that has differentiated itself from the rest. The good thing that separates NVR from other home builders is its ability to remain profitable regardless of the harshness of the market. It comes with a unique and separated business model, and it is easy for NVR to operate in a less capital-dependent manner. Other homebuilders buy a large piece of land, divide it into segments and build the homes. They then advertise them with the hope that a buyer will come their way. On the other hand, NVR operates differently. Instead of buying the chunk of land, it builds an agreement by depositing something little to be allowed to build. This helps it survive even during the bad market since less is lost.
Zillow deals more with real estate, and it has recently embarked on a mission of buying and selling properties and originating the mortgage. Mainly, Zillow buys homes, renovates them, and lists the houses for sale. The company is experiencing growth and providing loans to consumers who buy homes through Zillow Offers. Therefore, considering its thriving rate, buying stocks here is a wise idea.
These are not the only home improvement stocks out there. However, they are unique and worth mentioning considering that they show high potential for long-term returns. So, if you want to invest in any of them, be particular about your goals and how much risk you can tolerate.