Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Household Durables industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Household Durables Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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7 Undervalued Household Durables Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Household Durables industry for Thursday, October 10, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Household Durables industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Beazer Homes USA, Inc.’s Value Grade

Value Grade:

Beazer Homes USA, Inc. operates as a homebuilder in the United States. It designs, constructs, and sells single-family and multi-family homes under the Beazer Homes, Gatherings, and Choice Plans names. The company also sells its homes through commissioned new home sales counselors and independent brokers in Arizona, California, Nevada, Texas, Indiana, Delaware, Maryland, Tennessee, Virginia, Florida, Georgia, North Carolina, and South Carolina. Beazer Homes USA, Inc. was founded in 1985 and is headquartered in Atlanta, Georgia.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Beazer Homes USA, Inc. has a Value Score of 85, which is considered to be undervalued.

When you look at Beazer Homes USA, Inc.’s price-to-sales ratio at 0.45 compared to the industry median at 0.89, this company has a lower price relative to revenue compared to its peers. This could make Beazer Homes USA, Inc.’s stock more attractive for value investors.

Beazer Homes USA, Inc.’s price-earnings ratio is 6.90 compared to the industry median at 12.20. This means it has a lower share price relative to earnings compared to its peers. This could make Beazer Homes USA, Inc. more attractive for value investors.

Now, let’s assess Beazer Homes USA, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 10.1, when compared to the industry median of 10.6, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Beazer Homes USA, Inc.’s shareholder yield is lower than its industry median ratio of 1.15%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Beazer Homes USA, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.56. This could make Beazer Homes USA, Inc. more attractive to investors looking for a new addition to their portfolio.

Lennar Corporation’s Value Grade

Value Grade:

Lennar Corporation, together with its subsidiaries, operates as a homebuilder primarily under the Lennar brand in the United States. It operates through Homebuilding East, Homebuilding Central, Homebuilding Texas, Homebuilding West, Financial Services, Multifamily, and Lennar Other segments. The company’s homebuilding operations include the construction and sale of single-family attached and detached homes, as well as the purchase, development, and sale of residential land; and development, construction, and management of multifamily rental properties. It also offers residential mortgage financing, title, insurance, and closing services for home buyers and others, as well as originates and sells securitization commercial mortgage loans. In addition, the company is involved in the fund investment activity. It primarily serves first-time, move-up, active adult, and luxury homebuyers. Lennar Corporation was founded in 1954 and is based in Miami, Florida.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Lennar Corporation has a Value Score of 82, which is considered to be undervalued.

Lennar Corporation’s price-earnings ratio is 11.0 compared to the industry median at 12.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Lennar Corporation more attractive for value investors.

Lennar Corporation’s price-to-book ratio is lower than its peers. This could make Lennar Corporation more attractive for value investors when compared to the industry median at 1.56.

You can read more about Lennar Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

La-Z-Boy Incorporated’s Value Grade

Value Grade:

La-Z-Boy Incorporated manufactures, markets, imports, exports, distributes, and retails upholstery furniture products in the United States, Canada, and internationally. It operates through Wholesale and Retail segments. The Wholesale segment manufactures and imports upholstered furniture, such as recliners and motion furniture, sofas, loveseats, chairs, sectionals, modulars, ottomans, and sleeper sofas; and imports, casegoods (wood) furniture, including bedroom sets, dining room sets, entertainment centers, and occasional pieces. This segment sells its products directly to La-Z-Boy Furniture Galleries stores, operators of La-Z-Boy Comfort Studio locations, England Custom Comfort Center locations, dealers, and other independent retailers. The Retail segment sells upholstered furniture, casegoods, and other accessories to the end consumer through its retail network. It also licenses La-Z-Boy brand name on various products; and operates Joybird, an e-commerce retailer and manufacturer of upholstered furniture. The company was formerly known as La-Z-Boy Chair Company and changed its name to La-Z-Boy Incorporated in 1996. La-Z-Boy Incorporated was founded in 1927 and is headquartered in Monroe, Michigan.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

La-Z-Boy Incorporated has a Value Score of 75, which is considered to be undervalued.

La-Z-Boy Incorporated’s price-earnings ratio is 14.3 compared to the industry median at 12.2. This means that it has a higher price relative to its earnings compared to its peers. This makes La-Z-Boy Incorporated less attractive for value investors.

La-Z-Boy Incorporated’s price-to-book ratio is lower than its peers. This could make La-Z-Boy Incorporated more attractive for value investors when compared to the industry median at 1.56.

You can read more about La-Z-Boy Incorporated’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

M/I Homes, Inc.’s Value Grade

Value Grade:

M/I Homes, Inc., together with its subsidiaries, engages in the construction and sale of single-family residential homes in Ohio, Indiana, Illinois, Minnesota, Michigan, Florida, Texas, North Carolina, and Tennessee. The company operates through Northern Homebuilding, Southern Homebuilding, and Financial Services segments. It also designs, constructs, markets, and sells single-family homes and attached townhomes to first-time, millennial, move-up, empty-nester, multi-generational, and luxury homebuyers under the M/I Homes brand name. In addition, the company purchases undeveloped land to develop into developed lots for the construction of single-family homes, as well as for sale to others. Further, the company originates and sells mortgages; and serves as a title insurance agent by providing title insurance policies, examination, and closing services to purchasers of its homes. M/I Homes, Inc. was founded in 1976 and is based in Columbus, Ohio.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

M/I Homes, Inc. has a Value Score of 71, which is considered to be undervalued.

M/I Homes, Inc.’s price-earnings ratio is 8.9 compared to the industry median at 12.2. This means that it has a lower price relative to its earnings compared to its peers. This makes M/I Homes, Inc. more attractive for value investors.

M/I Homes, Inc.’s price-to-book ratio is lower than its peers. This could make M/I Homes, Inc. more attractive for value investors when compared to the industry median at 1.56.

You can read more about M/I Homes, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Meritage Homes Corporation’s Value Grade

Value Grade:

Meritage Homes Corporation, together with its subsidiaries, designs and builds single-family attached and detached 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 entry-level and first move-up buyers in Arizona, California, Colorado, Utah, Texas, Florida, Georgia, North Carolina, South Carolina, and Tennessee. The company also offers title and escrow, mortgage, insurance, and closing/settlement services to its homebuyers. Meritage Homes Corporation was founded in 1985 and is based in Scottsdale, Arizona.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Meritage Homes Corporation has a Value Score of 87, which is considered to be undervalued.

Meritage Homes Corporation’s price-earnings ratio is 8.6 compared to the industry median at 12.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Meritage Homes Corporation more attractive for value investors.

Meritage Homes Corporation’s price-to-book ratio is higher than its peers. This could make Meritage Homes Corporation less attractive for value investors when compared to the industry median at 1.56.

You can read more about Meritage Homes Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Purple Innovation, Inc.’s Value Grade

Value Grade:

Purple Innovation, Inc. designs and manufactures sleep and other products in the United States and internationally. The company offers mattresses, pillows, cushions, bases, sheets, platforms, adjustable bases, mattress protectors, foundations, blankets, duvets, duvet covers, seat cushions, and pet beds under the Purple brand. It markets and sells its products through its e-commerce online channels, retail brick-and-mortar wholesale partners, third-party online retailers, and Purple showrooms, as well as through its website, Purple.com. The company was founded in 2010 and is headquartered in Lehi, Utah.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Purple Innovation, Inc. has a Value Score of 77, which is considered to be undervalued.

Purple Innovation, Inc.’s price-to-book ratio is higher than its peers. This could make Purple Innovation, Inc. less attractive for value investors when compared to the industry median at 1.56.

You can read more about Purple Innovation, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Universal Electronics Inc.’s Value Grade

Value Grade:

Universal Electronics Inc. designs, develops, manufactures, ships, and supports control and sensor technology solutions in the United States, the People’s Republic of China, rest of Asia, Europe, Latin America, and internationally. The company offers voice-enabled automatically-programmed universal two-way radio frequency, as well as infrared remote controls to video service providers, original equipment manufacturers (OEMs), retailers, and private label customers; wall-mount and handheld thermostat controllers and connected accessories for smart energy management systems to OEM customers, hotels, hospitality, and system integrators; proprietary and standards-based RF sensors for residential security, safety, and home automation applications; and integrated circuits on which its software and universal device control database is embedded to OEMs, video service providers, and private label customers. It also provides software, firmware and technology solutions that can enable devices such as Smart TVs, hybrid set-top boxes, audio systems, smart speakers, game consoles, and other consumer electronic and smart home devices to wirelessly connect and interoperate within home networks; cloud-services that support its embedded software and hardware solutions; intellectual property that the company licenses to OEMs and video service providers; embedded and cloud-enabled software for firmware update provisioning and digital rights management validation services to consumer electronics brands; and AV accessories, including universal remote controls, television wall mounts and stands, and digital television antennas. In addition, the company QuickSet, a software application that can be embedded in entertainment or smart home platform or can be delivered as a cloud-based service, through QuickSet Cloud, to enable universal device setup, interoperability, and control. Universal Electronics Inc. was incorporated in 1986 and is based in Scottsdale, Arizona.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Universal Electronics Inc. has a Value Score of 64, which is considered to be undervalued.

Universal Electronics Inc.’s price-to-book ratio is higher than its peers. This could make Universal Electronics Inc. less attractive for value investors when compared to the industry median at 1.56.

You can read more about Universal Electronics Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Household Durables Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Household Durables stocks as well as other industrys.

Choosing Which of the 7 Best Household Durables Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Beazer Homes USA, Inc. stock has a Value Grade of A.
• Lennar Corporation stock has a Value Grade of A.
• La-Z-Boy Incorporated stock has a Value Grade of B.
• M/I Homes, Inc. stock has a Value Grade of B.
• Meritage Homes Corporation stock has a Value Grade of A.
• Purple Innovation, Inc. stock has a Value Grade of B.
• Universal Electronics Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 7 undervalued stocks in the Household Durables industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Household Durables Stocks

Want to learn more about Household Durables stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 7 Undervalued Household Durables Stocks for Thursday, October 10
• 6 Undervalued Household Durables Stocks for Wednesday, October 09
• Why Sony Group Corp (ADR)’s (SONY) Stock Is Down 80.00%
• 5 Undervalued Household Durables Stocks for Tuesday, October 08

AAII Disclaimer

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