Home-remodeling stocks to spruce up your portfolio

As homeowners look to renovate rather than sell for a loss, DIY companies are booming.

By Benzinga Mar 20, 2013 1:37PM
Bathroom remodel  copyright Digital Vision, PhotolibraryBy Tim Parker

It's simple, really. Despite the recent positive news in housing, growth is slow and many homeowners still haven't recovered from the housing bust of five years ago.


According to Forbes, many people are staying in their homes longer and choosing to remodel instead of selling at a loss.


The remodeling industry is the big winner. Projections call for revenue of $500 billion in 2013 if all goes as expected. Better yet, as the housing industry grows so will the remodeling industry. It's a win-win of the highest magnitude.


The reason? New homeowners spend double the amount of existing homeowners in the first two years of ownership. They spend it on items like paint, room restructuring, basement refinishing and appliances, to name a few.


Further, a recent survey conducted by Better Homes and Gardens Real Estate and reported by The Wall Street Journal discusses a new type of homebuyer on the market. These 18 to 35 year-olds are rewriting the rules of homeownership and reinterpreting traditional norms to fit their values.


Results of the survey indicate that the next generation of homeowners seeks more purpose-oriented homes, equipped with the technology they are used to, as opposed to stereotypical luxury homes preferred by their parents' generation.


Eighty-two percent of these "Millennials" embrace their independence and prefer to handle home improvements on their own. Dubbed the "Fix-It" generation, they are prepared for home maintenance tasks and would actually prefer a "fixer-upper" to a house with minimal repairs needed or in "move-in" condition.


They aren't afraid of rolling up their sleeves either. Nearly half of survey respondents are 

more likely to tackle a home maintenance problem themselves instead of calling a professional.


Stocks that have exposure to remodeling have done well over the past 12 months. These include Sherwin Williams (SHW) which is up 55%, Home Depot (HD), on the plus side by 44%, Lowe's (LOW), up 35%, CaesarStone Sdot-Yam Ltd. (CSTE), a whopping 107% increase, and Lumber Liquidators (LL), up an amazing 174%, to name just a few.


Given the positive condition of the housing market, the numbers of homeowners considering remodeling, and an entire generation of new homeowners ready to get their hands dirty when it comes to working on their homes, investors have plenty of reason for optimism when it comes to the future for remodeling stocks.


More from Benzinga
0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

114
114 rated 1
278
278 rated 2
474
474 rated 3
641
641 rated 4
639
639 rated 5
663
663 rated 6
640
640 rated 7
499
499 rated 8
284
284 rated 9
122
122 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
COPCONOCOPHILLIPS9
TAT&T Inc9
VZVERIZON COMMUNICATIONS9
KOGKODIAK OIL & GAS Corp9
CVXCHEVRON CORPORATION8
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.