Though home-building and manufacturing stocks may not be the most exciting, four of them have not only managed to double over the last year, but they still trade cheaper than the
S&P 500.
Barron’s screened a universe of mid-cap, large-cap, and megacap stocks to find the ones that have more than doubled in the last year, are trading above $10 a share, and have a price/earnings ratio of less than 19. For comparison, over the last 12 months, the S&P ‘s P/E ratio is 22.3, according to FactSet.
The resulting list of stocks includes
Builders FirstSource
(ticker: BLDR),
M/I Homes
(MHO),
Dream Finders Homes
(DFH), and
Modine Manufacturing
(MOD).
Builders FirstSource
Builders FirstSource,
which manufactures building materials and is based in Irving, Texas, has soared 113% over the last 12 months, is trading around $137 a share, and has a P/E of 10.6.
Earlier this month, the company delivered better-than-expected second-quarter earnings. A majority of analysts are bullish on the stock, with 69% rating it Buy and 31% Sell, according to FactSet. It was highlighted in a Barron’s Q&A with GoodHaven’s Larry Pitkowsky in April.
M/I Homes
M/I Homes
engages in the construction and development of residential properties. Based in Columbus, Ohio, the stock has gained 114% over the last 12 months, is trading around $94 a share, and has a P/E of 5.5. In July, the company posted second-quarter earnings that easily beat analysts’ estimates.
“We believe our industry will continue to benefit from strong fundamentals, including favorable demographic trends and an undersupply of housing,” CEO Robert Schottenstein said in the earnings release. “Looking ahead, we are well positioned to continue delivering strong results.”
Dream Finders Homes
Dream Finders Homes,
which designs, builds, and sells homes in high-growth markets, is based in Jacksonville, Florida. Shares are up 142% over the last 12 months, trading around $27 a share, and have a P/E of 11.38.
Earlier this month, the company said second-quarter home-building revenue rose 19% from the year-ago quarter, and the average sales price of homes closed increased 9% over the same period of time.
Modine Manufacturing
Racine, Wisconsin-based Modine Manufacturing, a thermal management products and solutions company, has seen shares skyrocket 187% over the last 12 months, trades around $46 a share, and has a P/E of 13.32.
Earlier this month, the company flew past earnings estimates for its first fiscal quarter and hiked its outlook for fiscal 2024.
The Takeaway
Three of the stocks are small players in the housing space and the fourth is in the auto sector. The largest of the group, Builders First Source, notches a market cap of $16.48 billion, while the other three hover under $3 billion. For context,
Carrier Global
(CARR), the maker of heating, ventilation, and air conditioning products and a major holding in the
SDPR S&P Homebuilders ETF
(XHB), has a market cap of about $45 billion.
It’s not a glamorous bunch, but it sure is an interesting one.
Write to Emily Dattilo at [email protected]
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