Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 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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6 Undervalued Household Durables Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Household Durables industry for Tuesday, October 29, 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.

KB Home’s Value Grade

Value Grade:

KB Home operates as a homebuilding company in the United States. It operates through four segments: West Coast, Southwest, Central, and Southeast. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, second move-up, and active adult homebuyers. The company also provides financial services, such as insurance products and title services, as well as mortgage banking services, including residential consumer mortgage loans to homebuyers. It has operations in Arizona, California, Colorado, Florida, Idaho, Nevada, North Carolina, Texas, and Washington. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is based in Los Angeles, California.

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.

KB Home has a Value Score of 79, which is considered to be undervalued.

When you look at KB Home’s price-to-sales ratio at 0.94 compared to the industry median at 0.80, this company has a higher price relative to revenue compared to its peers. This could make KB Home’s stock less attractive for value investors.

KB Home’s price-earnings ratio is 10.30 compared to the industry median at 12.00. This means it has a lower share price relative to earnings compared to its peers. This could make KB Home more attractive for value investors.

Now, let’s assess KB Home’s EV/EBITDA ratio, also known as enterprise multiple. At 7.6, when compared to the industry median of 10.1, 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. KB Home’s shareholder yield is higher 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. KB Home’s price-to-book ratio is higher than its industry median ratio of 1.56. This could make KB Home fairly attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at KB Home’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. KB Home’s price-to-free-cash-flow ratio is higher than its industry median ratio of 17.65. This could make KB Home less attractive because the higher P/FCF ratio indicates that KB Home is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

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 73, which is considered to be undervalued.

M/I Homes, Inc.’s price-earnings ratio is 8.7 compared to the industry median at 12.0. 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.

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 78, 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.

Q.E.P. Co., Inc.’s Value Grade

Value Grade:

Q.E.P. Co., Inc. designs, manufactures, and distributes flooring installation solutions for commercial and home improvement projects worldwide. The company’s product portfolio includes tile saws, blades, and accessories; tile cutters and accessories; hand tools; tile spacers and leveling systems; suction cups; trowels and floats; mixers and paddles; drill bits, hole saws, and jigsaw blades; scarpers and blades; clean-up, repair, and maintenance products; knee pads and safety products; underlayment products; installation kits; and cement boards tools. It markets its products under the QEP, LASH, Roberts, Capitol, Homelux, Brutus, PRCI, Tomecanic, andPremix-Marbletite (PMM) brands. The company sells its products to home improvement retail centers and specialty distribution outlets. Q.E.P. Co., Inc. was founded in 1979 and is headquartered in Boca Raton, 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.

Q.E.P. Co., Inc. has a Value Score of 90, which is considered to be undervalued.

Q.E.P. Co., Inc.’s price-earnings ratio is 9.4 compared to the industry median at 12.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Q.E.P. Co., Inc. more attractive for value investors.

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

You can read more about Q.E.P. Co., 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.

Toll Brothers, Inc.’s Value Grade

Value Grade:

Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, sells, and arranges finance for a range of detached and attached homes in luxury residential communities in the United States. It designs, builds, markets, and sells condominiums through Toll Brothers City Living. The company also develops a range of single-story living and first-floor primary bedroom suite home designs, as well as communities with recreational amenities, such as golf courses, marinas, pool complexes, country clubs, and fitness and recreation centers; and develops, operates, and rents apartments. In addition, it provides various interior fit-out options, such as flooring, wall tile, plumbing, cabinets, fixtures, appliances, lighting, and home-automation and security technologies. Further, the company owns and operates architectural, engineering, mortgage, title, land development, insurance, smart home technology, landscaping, lumber distribution, house component assembly, and component manufacturing operations. It serves luxury first-time, move-up, empty-nester, active-adult, and second-home buyers. Toll Brothers, Inc. was founded in 1967 and is headquartered in Fort Washington, Pennsylvania.

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.

Toll Brothers, Inc. has a Value Score of 77, which is considered to be undervalued.

Toll Brothers, Inc.’s price-earnings ratio is 10.4 compared to the industry median at 12.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Toll Brothers, Inc. more attractive for value investors.

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

You can read more about Toll Brothers, 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.

Viomi Technology Co., Ltd’s Value Grade

Value Grade:

Viomi Technology Co., Ltd, through its subsidiaries, develops and sells Internet-of-things-enabled (IoT-enabled) smart home products in the People's Republic of China. The company offers IoT-enabled smart home products, including smart water purification systems; smart kitchen products, such as refrigerators, oven steamers, dishwashers, range hoods, and gas stoves; and other smart products comprising air conditioning systems, washing machines, water heaters, smart water kettles, interactive smart screens (TVs), sweeper robots, smart locks, and other smart devices, as well as blenders. It also provides a suite of complementary consumable products and small appliances, such as portable fans, rice cookers, water quality meters, water filter pitchers, smart toilet, stainless-steel insulated water bottles, and food waste disposals; and value-added and installation services. The company sells its products directly to consumers through its online platform, Viomi mobile app, and e-commerce channels, including Youpin, JD.com, Tmall, Pinduoduo, and others, as well as offline experience stores. The company was founded in 2014 and is headquartered in Guangzhou, China.

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.

Viomi Technology Co., Ltd has a Value Score of 99, which is considered to be undervalued.

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

You can read more about Viomi Technology Co., Ltd’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 6 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.

• KB Home stock has a Value Grade of B.
• M/I Homes, Inc. stock has a Value Grade of B.
• Purple Innovation, Inc. stock has a Value Grade of B.
• Q.E.P. Co., Inc. stock has a Value Grade of A.
• Toll Brothers, Inc. stock has a Value Grade of B.
• Viomi Technology Co., Ltd stock has a Value Grade of A.

Now that you have a bit more background about each of the 6 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 Tuesday, October 29
• 6 Undervalued Household Durables Stocks for Monday, October 28
• 5 Undervalued Household Durables Stocks for Friday, October 25
• 5 Undervalued Household Durables Stocks for Thursday, October 24

AAII Disclaimer

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