The home improvement market has been growing exponentially since the onset of the COVID-19 pandemic because people have had to spend more time at home, which has increased their interest in home improvement and maintenance. Moreover, homeowners who are changing their preference towards modern and energy-efficient solutions motivate them to invest in sustainable restructuring and renovation works to reduce environmental impacts. With this tailwind, the home improvement services market is expected to reach $585.30 billion by 2030, Recording a compound annual growth rate of 6.2% From 2021 – 2030.
However, there is a shortage of affordable homes in developed areas, while real estate prices are rising, encouraging homeowners to renovate their existing homes rather than move to new ones. Moreover, remodeling of newly purchased old homes before moving in is another trend that contributes to the growth of the industry.
Given this background, we believe the established home improvement firms Lowe’s Companies, Inc. (Few) and Mohawk Industries, Inc. (MHK) can be strong bets now.
Lowe Companies, Inc. (Few)
low Mooresville, North Carolina, is a A retailer of home improvement in the United States and internationally. The company offers construction, maintenance, repair, rebuilding and decoration products.
On November 17, LOW announced a multi-year commitment to become the leading retail destination for aging in place and life-changing solutions with the launch of Lowe’s Livable Home. The company is also expanding its service options for customers seeking ratings through Lowe’s partners and Lowe’s independent service provider network. This one-stop destination should help LOW attract more customers and strengthen its position in the industry.
Also in November, LOW announced the upcoming launch of Measure Your SpaceBETA, an easy-to-use survey, measurement, and room estimation experience in Lowe’s iOS app. The company invests in emerging technologies such as LiDAR, artificial intelligence, and mixed reality to make home improvement simple and intuitive. “We call this futuristic spatial commerce, and we’re excited to offer it to our customers,” said Semantini Goodbull, executive vice president and chief information officer at Lowe’s.
LOW’s net sales rose 2.7% year over year to $22.92 billion in the fiscal third quarter ended Oct. 29. Operating income was $2.79 billion, up 28.2% from the same period last year. Its net profit grew 174% from its value last year to $1.90 billion. and the company EPS It rose 200% year-over-year to $2.73.
Revenue estimates of $20.84 billion for the fourth quarter of the fiscal year ending January 2022 indicate an improvement of 2.6% over the same period last year. Analysts expect the company’s earnings per share to be $1.69 in the current quarter, reflecting a 27.1% increase year-over-year. Furthermore, LOW exceeded Street’s EPS estimates in each of the subsequent four quarters.
LOW price rose 58.1% over the past year and 32.7% over the past six months to close yesterday’s trading session at $257.79.
LOW’s strong fundamentals are reflected in the POWR rankings. An overall LOW rating of B, which is equivalent to a purchase on our property POWR . ratings the system. POWR ratings are calculated by taking into account 118 characteristic factors, with each factor weighted to the optimum score.
LOW has a B grade for feel and quality. Out of 61 stocks rated B. Home improvement and merchandise Industry, ranked LOW #9.
In addition to the above, we also rated LOW for growth, value, momentum and stability. click here Show all low ratings.
Mohawk Industries, Inc. (MHK)
MHK in Calhoun, J.A.; , It designs, manufactures, sources, distributes and markets flooring products for the rebuilding and new construction of residential and commercial spaces worldwide. It operates through three divisions: Global Ceramics. North American Flooring (NA Flooring), Rest of the World Flooring (ROW Flooring).
The company signed up to The Climate Pledge, a sustainability-driven effort, and agreed to integrate climate-sensitive strategies, neutralize residual emissions with sustainable and socially beneficial offsets, achieve net-zero annual carbon emissions by 2040, and implement decarbonization strategies.
MHK’s net sales rose 9.4% year over year to $2.82 billion in the fiscal third quarter ended Oct. Its operating income grew 37% over its value a year ago to $359.97 million. Its adjusted net profit was $272.05 million, indicating an increase of 16.8% over the same period last year. The company’s adjusted earnings per share increased 21.2% year-over-year to $3.95.
Analysts expect MHK’s revenue to increase 17% year over year to reach $11.17 billion in fiscal 2021. Estimated earnings per share of $14.77 for the year are up 67.3% year over year. The company has an impressive history of earnings; It has outperformed its combined earnings per share estimates in each of the subsequent four quarters.
Over the past year, the stock price rose 26.2% to close yesterday’s trading session at $180.47.
Not surprisingly, MHK has an overall score of B, which is equivalent to a buy rating in our POWR Ratings system. MHK has also received a B grade for value, momentum and quality. It is ranked No. 6 in Home improvement and merchandise industry. click here To view additional MHK ratings for growth, feel, and stability.
Losers were trading at $252.16 a share Friday morning, down $5.63 (-2.18%). Year-to-date, LOW is down -2.45%, versus a -2.04% rise in the benchmark S&P 500 over the same period.
About the author: Subhasree Kar
Subhasree’s keen interest in financial instruments led him to pursue a career as an investment analyst. After completing her master’s degree in economics, she gained knowledge of equity research and portfolio management at Finlatics. more…
More resources to stock in this article