During a bearish market, home improvement actions have historically been solid defensive games
The housing sector is slowing. The rise in mortgage rates is having the predictable effect of cooling demand.
Or are they? While homeowners may not be able to get the same premium they could get just a year ago, there is still a wide range of homes on the market. And once these houses change hands, the new owners will be ready to make their new home their own.
However, this is not the only catalyst for home improvement stocks. It is likely that homeowners who decide to “love” it instead of “listing” it will invest money in one of their largest investments while waiting for the housing pendulum to return in their favor.
In this article, I will give you three home improvement companies that continue to generate significant revenue and earnings. And two of these companies are also members of the exclusive Dividend Aristocrat club. These are companies that have increased their dividend for at least 25 consecutive years.
If this is the kind of balance of growth and income that attracts you, it may be time for you to consider these three home improvement actions.
Lowe’s (NYSE: LOW) shares have fallen 30% in 2022. This is bigger than the wider market. But in the last month, the stock is showing signs of forming funds. And with stocks near their 52-week low, it may be time for investors to take a closer look at the stocks.
The engine of this feeling can be the profits of the company. In May, Lowe’s closed the fiscal year. Revenue growth had an uninspiring growth of 1%. But revenue rose 19%. Even if companies are heading for a profit recession, a P / E ratio slightly below the industry average means it is likely that Lowe’s may see growth, albeit perhaps slower growth, next fiscal year. .
And Lowe’s offers investors a solid dividend that has risen in each of the last 48 years. The current payment is $ 3.20 per share annually and the company has increased its average dividend by 17% over the past three years.
Home Depot (HD)
Just as investors can debate Coca Cola (NYSE: KO) versus Pepsi (NASDAQ: PEP) among discretionary consumer actions, they can often plant their flag with Lowe’s or Home Depot (NYSE: HD) when it comes to home improvement stocks.
To be fair, none of these stocks seem like a bad choice for investors who are worried about a recession. Home Depot filed a solid earnings report in May 2022. Revenue rose 3.8% and earnings per share rose 5.8%. The company offered strong sales growth in the same stores which was largely due to its relationship with professional contractors.
Of the three shares in this article, Home Depot has the highest dividend yield (2.68%) and the highest payout ($ 7.60). And while he’s not a dividend aristocrat, the company has increased its dividend in each of the last 14 years.
Sherwin Williams (SHW)
Painting is one of the most cost effective ways to give a refreshing upgrade to a home. And as we move into the fall, the owners ’attention is focused on finding that perfect sample of paint to transform a room. That’s enough to put Sherwin-Williams (NYSE: SHW) on my radar and maybe yours too. Historically, the current and next quarter are the company’s strongest in terms of revenue.
But skeptics will point out that the gains have been a mixed bag. The company has lost analysts ’expectations in two of the last four quarters and in the other two the gains were lukewarm. And I’ll admit that a mixed earnings outlook is likely to reduce current price targets from their 30% upside.
That said, SHW shares offer growth and revenue that is attractive in this volatile market. Sherwin Williams ’1% dividend yield is unlikely to cause income investors to faint. But the company pays $ 2.40 a year. The company also has a three-year dividend growth of 24.26% and has increased its dividend in each of the last 44 years.