The home improvement stocks to look forward to in 2021.
The home improvement stocks once again must be on investor’s radar. The global pandemic has prolonged and does not seem to ease off. In the meantime, people spend most of their time at home—having much time to observe and identify the room for improvement.
We have various companies that are working quite well in this sector and have much potential in the future. The increase spent on revamping the inside infrastructure has spiked during the COVID-19 era. This inclination in demand has played out as an upside for several companies in the home improvements space. So, there are certain key stocks to keep on your watch list. Here are the two best home improvement stocks to buy now.
Lowe’s Companies (LOW)
Lowe’s Companies (LOW) a US-based company that specializes in home improvement. The company is among Zacks’ top-ranked firms that are up to the standard. The three factors that could make Lowe’s a good investment option are:
The first one is earnings growth. For any company, the earnings growth is a top indicator to judge the stock’s position and future potential. The historical EPS growth rate for Lowe’s is 17.6%, though the investors must know what’s up next. For this year, Lowe’s EPS is forecasted to have a growth rate of 52.4%, bamboozling the industry average quite extraordinarily, which is anticipated to be 14.8%.
The second important factor is its impressive asset utilization ratio. It’s quite important and growth investors often overlook this aspect. The company has aS/TA ratio of 1.82, which means that Lowe’s earns $1.82 in sales for each dollar in assets. Whereas, the average industry rate stands at $1.67. So, Lowe’s tops the industry in this regard, as well.
Moreover, the last important factor is the continuous revision of earnings estimates, which have been moving upwards. Zacks earnings estimate for 2021 has soared 0.1% over the first four weeks of 2021.
Lumber Liquidators (LL)
Lumber Liquidators (LL) is a holding company that has multi-channels with retailers in hardwood flooring, and hardwood flooring enhancements and accessories. The company has been performing well and the quarterly results have improved quite well during the pandemic.
The company saw a rise in sales trends with sequential improvement in its Pro and Install customers. For the first half of 2020, the company saw a notable rise in demands, which continued into the next quarters. In Q3, the company reported revenues of $295.83 million, beating Zacks estimates by 3.55% and $263.96 million year-over-year. The quarterly earnings per share came in at $0.67, more than double of Zacks’ estimates of $0.30 per share. While it was a skyrocketing jump from the prior-year earnings of $0.08. At the moment, the outlook is quite positive and LL lies in the range of the buy zone.