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The Zacks Analyst Blog Highlights: M/I Homes, Meritage, PulteGroup, D.R. Horton and NVR

For Immediate Release

Chicago, IL –November 29, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: M/I Homes Inc. MHO, Meritage Homes Corp. MTH, PulteGroup Inc. PHM, D.R. Horton Inc. DHI and NVR Inc. NVR.

Here are highlights from Wednesday’s Analyst Blog:

U.S. Home Price Gains Gather Pace in September: 5 Top Picks

U.S. home price gains accelerate in September after a long period of decelerating price increases. According to the S&P CoreLogic Case-Shiller U.S. National Home Price Index, U.S. home prices rose 3.2% year over year in September, following a gain of 3.1% in August on a national level.

The 20-City Composite Home Price Index rose 2.1% year over year, after 2.0% gain in August. However, the 10-City Composite Home Price index remained flat with the 1.5% rate of August. Low supply of homes for sale associated with strong housing demand resulted in accelerated price increases.

Momentum Likely to Continue

The strong pricing momentum in the housing sector is likely to continue in the near future. The U.S. housing sector rebounded in October buoyed by a low mortgage rate and a fundamentally stable domestic economy, which is growing for the historically longest 11 years, albeit with some loss in pace.

The housing starts marked the second-highest gain in October while building permits achieved the highest level in more than 12 years. Moreover, new home sales in October came in at 733,000, slightly below the revised estimates of 738,000 in September (original reading was 701,000). However, the figure surpassed the consensus estimate of 706,000.  

Turnaround in the housing sector is important since it generates more than 3% of the U.S. GDP. The Fed has reduced the benchmark interest rate by 75 basis points, which has helped the mortgage rate remain low. According to mortgage finance agency Freddie Mae, the 30-year fixed mortgage rate is currently hovering around 4%, well below 4.94% in November 2018.

Our Top Picks

At this stage, it will be prudent to invest in homebuilding stocks with a favorable Zacks Rank. We narrowed down our search to five such stocks.  Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

M/I Homes Inc. operates as a builder of single-family homes in Ohio, Indiana, Illinois, Minnesota, Maryland, Virginia, North Carolina, Florida, and Texas. It operates through the Midwest Homebuilding, Southern Homebuilding, Mid-Atlantic Homebuilding, and Financial Services segments.

The Zacks Rank #1 company has an expected earnings growth rate of 31.9% for the current year. The Zacks Consensus Estimate for the current year has moved up 14.6% over the last 60 days.

Meritage Homes Corp. designs and builds single-family homes in the United States. The company operates through two segments, Homebuilding and Financial Services. It acquires and develops land, and constructs, markets, and sells homes for first-time and first move-up buyers.

The Zacks Rank #1 company has an expected earnings growth rate of 1.8% for the current year. The Zacks Consensus Estimate for the current year has moved up 4.4% over the last 60 days.

PulteGroup Inc. is engaged in homebuilding and financial services businesses, primarily in the United States. It conducts operations through two primary business segments – Homebuilding and Financial Services.

The Zacks Rank #1 company has a negative expected earnings growth rate for the current year. However, its expected earnings growth for the next year is 10.2%. The Zacks Consensus Estimate for the current and next year has moved 3.5% and 4.8% north over the last 60 days.

D.R. Horton Inc. operates as a homebuilding company in East, Midwest, Southeast, South Central, Southwest, and West regions in the United States. It constructs and sells single-family detached homes, and attached homes, such as town homes, duplexes and triplexes.

The Zacks Rank #2 company has an expected earnings growth rate of 13.8% for the current year. The Zacks Consensus Estimate for the current year has moved up 6.3% over the last 60 days.

NVR Inc.operates as a homebuilder in the United States. It primarily constructs and sells single-family detached homes, townhomes and condominium buildings under the Ryan Homes, NVHomes and Heartland Homes names.

The Zacks Rank #2 company has an expected earnings growth rate of 9.6% for the current year. The Zacks Consensus Estimate for the current year has moved up 2.1% over the last 60 days.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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PulteGroup, Inc. (PHM): Free Stock Analysis Report
 
Meritage Homes Corporation (MTH): Free Stock Analysis Report
 
M/I Homes, Inc. (MHO): Free Stock Analysis Report
 
D.R. Horton, Inc. (DHI): Free Stock Analysis Report
 
NVR, Inc. (NVR): Free Stock Analysis Report
 
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