Home improvement trends have changed drastically over the past year due to the COVID-19 pandemic, which has caused an unprecedented tidal wave of housing projects, with homeowners moving more time at home than before the public health disaster. While interest rate hikes expected this year could hurt the housing market and consumer spending, the U.S. home improvement market is expected to grow at a CAGR of 4.5% through 2026.
Net sales of Home Depot Inc., based in Atlanta, Georgia (HD) increased 10.7% year-over-year to $35.72 billion in its most recent quarter. However, the stock is down 19% since the start of the year. The company cited soaring lumber prices as a major impediment to its growth. Additionally, with the ongoing supply chain crisis and rising inflation, analysts expect HD’s EPS to decline 4.7% year-over-year to 3, $68 for the first quarter, ending April 30, 2022, while its revenue is expected to decline 2.7% year-on-year. year-on-year to $36.49 billion.
Meanwhile, home improvement companies Lowe’s Companies, Inc. (LOW), Haverty Furniture Companies, Inc. (HVT) and Tile Shop Holdings, Inc. (TTSH) showed stable performance. Their stocks have strong fundamentals and are poised to take advantage of industry tailwinds. Therefore, we think they might be better bets than HD.
Lowe’s Companies, Inc. (LOW)
LOW operates as a home improvement retailer internationally through its subsidiaries and offers several products for construction, maintenance, repair, renovation and decoration. the Company based in Mooresville, North Carolina also offers home improvement products in various categories, including appliances, paint, hardware, millwork, lawn and garden, lighting, lumber and building materials.
Last month, Instacart and LOW formed a partnership to offer same-day delivery in just one hour, which will initially be available in Boston and Charlotte, but will expand in the coming months. Customers can now avail of approximately 20,000 items from LOW, including small appliances, building materials, lighting, garden and outdoor items, and more, delivered from store to door.
LOW’s net sales increased 5.1% year-over-year to $21.34 billion in the fourth quarter, ended January 28, 2022. Its operating result rose 21.3% from its value a year ago to $1.85 billion, while its net profit improved 23.3% year-over-year to reach 1.21 billion dollars over the period. Its EPS rose 34.8% from the prior year quarter to $1.78.
Analysts expect LOW’s revenue to grow 2.6% year-over-year to $28.29 billion in the second quarter (ending July 2022). The company’s EPS is expected to increase 1.2% year-over-year to $3.25 in the first quarter, ending April 30, 2022. profits; it has exceeded consensus EPS estimates in each of the past four quarters. The stock price has gained 34.4% over the past year and 25.4% over the past nine months.
LOW POWR Rankings reflect this promising prospect. The company has an overall rating of B, which translates to Buy in our proprietary rating system. POWR ratings rate stocks on 118 separate factors, each with its own weighting.
LOW is also rated B for quality and sentiment. Within the Home improvement and goods Industry, it is ranked #13 out of 65 stocks.
To see additional POWR ratings for Growth, Value, Stability, and Momentum for LOW, Click here.
Haverty Furniture Companies, Inc. (HVT)
HVT in Atlanta, Ga., is a specialty retailer of home furnishings and accessories. It offers furniture under the Havertys brand, as well as custom upholstery and eclectic looks, and mattress lines under the Sealy, Tempur-Pedic and Serta names, as well as the Skye private label.
During the fourth quarter ended December 31, 2021, HVT net sales increased 10.2% year-over-year to $265.9 million. Its gross profit rose 9% from its value a year ago to $150 million. The company’s net income was $24.31 million, while its EPS was $1.35 over the period.
HVT is expected to experience revenue growth of $1.03 billion, or 1.3% year-over-year growth in fiscal 2022. The consensus EPS estimate of 4.78 $ for its 2023 fiscal year indicates a 4.60% year-over-year improvement. Additionally, the company has an impressive track record of earnings surprises; it has exceeded consensus EPS estimates in each of the past four quarters. The stock has gained 12.7% in price over the past month.
HVT’s strong fundamentals are reflected in its POWR ratings. The company has an overall rating of B, which translates to Buy in our proprietary rating system. HVT is also rated A for quality and B for value. Within the Home improvement and goods the industry, it is ranked #8.
Click here to see additional POWR ratings for Growth, Stability, Sentiment and Momentum for HVT.
Tile Shop Holdings, Inc. (TTSH)
TTSH operates as a specialist retailer of natural stone and synthetic tiles, setting and maintenance materials and other related accessories. The Plymouth, Minnesota-based company provides natural stone products, such as marble, travertine, granite, quartz, and man-made products, including ceramic, porcelain, glass, cement, look wood and metal tile under the Rush River and Fired Earth brands.
For the fourth quarter, ending December 31, 2021, TTSH sales increased 10.6% year-over-year to $90.18 million. Its operating income rose 9.5% year-over-year to $2.93 million, while its net income rose 31.5% from its value a year ago. has one year to reach $1.81 million. Its EPS rose 33.3% from the prior quarter to $0.04.
Analysts expect the company’s revenue to rise 1.1% year-over-year to $374.65 million for its fiscal year 2022. The stock price gained 0, 3% over the past month.
It’s no surprise that TTSH has an overall rating of B, which equates to Buy in our POWR rating system. The stock also has an A rating for quality and a B for feeling and stability. In the Home improvement and goods the industry, it is ranked #2.
In addition to the POWR Ratings ratings I just highlighted, you can see the TTSH Ratings for Growth, Momentum and Value.
LOW shares fell $1.68 (-0.72%) in premarket trading on Friday. Year-to-date, LOW is down -9.68%, compared to a -8.03% rise in the benchmark S&P 500 over the same period.
About the Author: Spandan Khandelwal
Spandan’s is a financial journalist and investment analyst specializing in the stock market. Through its ability to interpret financial data, it aims to help investors assess a company’s fundamentals before investing. After…