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 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.

Green Brick Partners, Inc.’s Value Grade

Value Grade:

Green Brick Partners, Inc. is a diversified homebuilding and land development company in the United States. The company operates through three segments: Builder operations Central, Builder operations Southeast, and Land Development. The Builder operations Central segment operates builders in Texas; and the closing and delivery of homes. The Builder operations Southeast operates builders in Georgia and Florida. The Land Development segment acquires land for the development of residential lots that are transferred to our controlled builders or sold to third party homebuilders. It also provides financial services platform, including mortgage and title services. In addition, the company is engaged in all aspects of the homebuilding process, including land acquisition and development, entitlements, design, construction, marketing, and sales for its residential neighborhoods and master-planned communities. Green Brick Partners, Inc. was incorporated in 2006 and is based in Plano, Texas.

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.

Green Brick Partners, Inc. has a Value Score of 66, which is considered to be undervalued.

When you look at Green Brick Partners, Inc.’s price-to-sales ratio at 1.84 compared to the industry median at 0.80, this company has a higher price relative to revenue compared to its peers. This could make Green Brick Partners, Inc.’s stock less attractive for value investors.

Green Brick Partners, Inc.’s price-earnings ratio is 10.50 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 Green Brick Partners, Inc. more attractive for value investors.

Now, let’s assess Green Brick Partners, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 7.5, 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. Green Brick Partners, Inc.’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. Green Brick Partners, Inc.’s price-to-book ratio is higher than its industry median ratio of 1.56. This could make Green Brick Partners, Inc. less attractive to investors looking for a new addition to their portfolio.

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.

KB Home’s price-earnings ratio is 10.3 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 KB Home more attractive for value investors.

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

You can read more about KB Home’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.

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 84, which is considered to be undervalued.

Lennar Corporation’s price-earnings ratio is 10.8 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 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 77, which is considered to be undervalued.

La-Z-Boy Incorporated’s price-earnings ratio is 14.2 compared to the industry median at 12.0. 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.

Mohawk Industries, Inc.’s Value Grade

Value Grade:

Mohawk Industries, Inc. designs, manufactures, sources, distributes, and markets flooring products for residential and commercial remodeling, and new construction channels in the United States, Europe, Latin America, and internationally. It operates through three segments: Global Ceramic, Flooring North America, and Flooring Rest of the World. The company provides ceramic, porcelain, and natural stone tiles products for floor and wall applications; natural stones, porcelain slabs, and quartz countertops, as well as installation materials; floor covering products comprising broadloom carpets, carpet tiles, rugs and mats, carpet pads, laminates, medium-density fiberboards, wood floorings, luxury vinyl tiles, and sheet vinyl; and roofing panels, insulation boards, mezzanine flooring products, medium-density fiberboard, and chipboards. It also licenses its intellectual property to flooring manufacturers. The company sells its products under the American Olean, Daltile, Decortiles, Eliane, EmilGroup, KAI, Kerama Marazzi, Marazzi, Ragno, Aladdin Commercial, Durkan, Foss, IVC, Karastan, Mohawk, Mohawk Group, Mohawk Home, Pergo, Portico, Quick-Step, Feltex, GH Commercial, Godfrey Hirst, Hycraft, IVC Commercial, IVC Home, Lentex, Leoline, and Moduleo, Redbook, Unilin, and Vitromex brands. It offers its products to company-owned service centers and stores, company-operated distributors, floor covering retailers, wholesalers, mass merchandisers, department stores, shop at home, buying groups, ceramic tile specialists, e-commerce retailers, residential builders, independent distributors, commercial contractors, and commercial end users. The company was incorporated in 1988 and is headquartered in Calhoun, 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.

Mohawk Industries, Inc. has a Value Score of 79, which is considered to be undervalued.

Mohawk Industries, Inc.’s price-earnings ratio is 14.9 compared to the industry median at 12.0. This means that it has a higher price relative to its earnings compared to its peers. This makes Mohawk Industries, Inc. less attractive for value investors.

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

You can read more about Mohawk Industries, 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.

Smith Douglas Homes Corp.’s Value Grade

Value Grade:

Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, 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.

Smith Douglas Homes Corp. has a Value Score of 93, which is considered to be undervalued.

Smith Douglas Homes Corp.’s price-earnings ratio is 4.3 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 Smith Douglas Homes Corp. more attractive for value investors.

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

You can read more about Smith Douglas Homes Corp.’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.

• Green Brick Partners, Inc. stock has a Value Grade of B.
• KB Home stock has a Value Grade of B.
• Lennar Corporation stock has a Value Grade of A.
• La-Z-Boy Incorporated stock has a Value Grade of B.
• Mohawk Industries, Inc. stock has a Value Grade of B.
• Q.E.P. Co., Inc. stock has a Value Grade of A.
• Smith Douglas Homes Corp. stock has a Value Grade of A.

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 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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