Some improvement companies are having a moment.
Across the country, people remain indoors, staring at the same four walls day after day due to the pandemic. The desire to improve one’s home, the need for something new and the sheer monotony of staying indoors all day have sparked huge consumer interest in home improvement projects. DIY projects and renovations are on the rise across the country. As a result, companies that can provide customers with everything they need to brighten up their homes are making impressive profits as a result. In fact, the six companies on this list have seen tremendous growth in recent months – and the protracted tailwind from an improving real estate market offers all six of these home improvement stocks a great opportunity to profit from returns. impressive well into the future.
Home Depot (ticker: HD)
Thanks to the sheer number of homeowners looking to do some renovations, Home Depot’s same-store sales were up 23.4% year over year in the second quarter. Indeed, the second quarter was a hit across the board; the company experienced a 100% increase in digital sales, as well as a 10.1% increase in average customer ticket. Online or offline, people are turning to The Home Depot more than ever for their home improvement needs and buying more per transaction – this is a winning combination for The Home Depot and its shareholders. While Home Depot’s projected price-to-earnings ratio is at relatively high value of 24.7, investors need not be concerned given the company’s recent performance and future prospects. A dividend yield of 2.13% only makes investing in Home Depot all the more enjoyable.
Unlike many companies in the market, Lowe’s had a great 2020. Shares are up nearly 40% so far, hitting a record high in August after the company reported impressive second-quarter results. That report included a 30.1% year-on-year increase in sales, as well as a 75% increase in diluted earnings per share. Other highlights included a 135% increase in sales for Lowes.com and an 11.6% increase in the average comparable ticket size. The doubling of more online shopping, coupled with more comprehensive shopping carts, has propelled Lowe’s to new heights. A 1.47% dividend yield makes the deal more pleasant for investors, who should be excited about what’s next for this fast-growing home improvement titan.
Speaking of skepticism, Overstock’s recent earnings have raised a lot of eyebrows on the market. Shares of the online retailer have risen 900% this year, and some analysts believe Overstock’s rise is far from over. All thanks to the company’s new CEO, Jonathan Johnson, who took the job last September and began shifting the company’s focus toward home furnishings – a decision that now seems particularly timely in light. of the pandemic. Overstock reaped the rewards in the second quarter when the company experienced a 205% year-over-year increase to new retail customers, which contributed to a staggering 109% increase in sales. net business. The current focus of customers on home improvement will strengthen Overstock’s business in the near term, and in the long term, today’s profit should lead to further profitability tomorrow.
While physical retailers around the world have been forced to close their doors and absorb the losses, online retailers like Wayfair have never been more profitable. Wayfair is providing customers with all the home furnishings they will ever need and customers have come to the site in record numbers – in fact, Wayfair saw nearly 5 million net new customers joining its site Web, which is more than the previous four quarters combined . All of these new clients contributed to an 83.7% year-over-year revenue increase in the quarter, which translated to non-GAAP (generally accepted accounting principles) EPS of $3.13. That’s well above the loss of $ 1.35 per share that Wayfair recorded in the second quarter of 2019. The company’s meteoric rise has some analysts skeptical about the ability to sustain these gains in the future, but Wayfair has clearly positioned itself for the future.
Sherwin-Williams Co. (SHW)
A fresh coat of paint can turn a house into a home, Sherwin-Williams knows, but the venerable paint producer hasn’t profited from higher rates of home renovation across the country. True, while DIY projects increased sales in Sherwin Williams’ consumer brands group by 21.8% year-on-year last quarter, those gains were offset by falling demand on professional markets; Sales in the performance coatings group dropped 16.5%, while the Americas group recorded a drop in sales of 8.4%. The result was a 5.6% drop in sales this quarter from a year earlier, but that didn’t stop the Sherwin-Williams stock from climbing 25% in 2020 as of mid-September. The recovery in professional demand thanks to a booming real estate market and the reopening of stores in its Americas group promises a better future for this painting company.
Pool Corp. (POOL)
As the urban exodus to the suburbs continues, many of these homeowners want to enjoy the outdoors from the comfort of their backyards. It should therefore come as no surprise that Pool Corp., supplier, and distributor of pool equipment, has enjoyed a historic summer. Pool Corp. reported second-quarter net sales of $1.28 billion in the second quarter, a company record, and a 14% increase year over year, while diluted earnings per share increased 20% to $3.87, another record. This has all been made possible thanks to a surge in demand for swimming pool equipment, as well as maintenance and repair supplies, as homeowners have renovated their outdoor spaces and with the arrival of new homeowners in the suburbs. , Pool Corp. saw an increase in demand for swimming pool building materials as well, indicating that long-term demand will support POOL’s hot series.