In February 2009, my article started off with, “So maybe you cannot make any money in residential real estate today. Why not buy stock in what goes in the house, furniture.”
I reviewed two company stocks in that story, Kirkland, Inc. (NASDAQ:KIRK) and Ethan Allen (NYSE:ETH). Since that article, Kirkland is up 359 percent and Ethan Allen is up 103 percent. What a lucky pick.
Three years later we can now turn our attention back to the residential and commercial building sector, its back on top.
Remember the headlines just three years ago showing the doom and gloom in Florida’s housing crash that ground the state’s economy to a halt. Today, the top stock in the residential and commercial building sector is a Florida-based company, Lennar Corp. (NYSE:LEN.B).
Lennar Corp.
Lennar is a homebuilder and a provider of financial services. The company, through its Rialto Investments segment, is an investor in distressed real estate assets.
The home building operations include the construction and sale of single-family attached and detached homes, multi-level residential buildings, as well as the purchase, development and sale of residential land directly and through unconsolidated entities in which the company has investments.
The company’s homebuilding activities operate in four business segments: Homebuilding East, Homebuilding Central, Homebuilding West and Homebuilding Houston.
Its financial services segment provides mortgage financing, title insurance and closing services for both buyers of the company’s homes and others.
During the fiscal year ended Nov. 30, 2010, it also completed the closing of its Rialto real estate investment fund.
Lennar stock shares are up ten percent over the past year (Jan. 24, 2011 - Jan. 20, 2012). The stock hit a bottom in August 2011 about $8.95 a share. Shares have rebound with a nice 14 percent jump year-to-date, closing Friday at $17.90, down two percent for the day.
LEN.B has a 52-week low of $8.95 and a high of $18.91.
M.D.C. Holdings, Inc.
For a good dividend stock in this sector take a look at M.D.C. Holdings, Inc. (NYSE:MDC) in Colorado.
MDC operates in two business segments: homebuilding and financial services.
The homebuilding operations consist of wholly owned subsidiary companies, which purchase finished lots for the construction and sale of single-family detached homes to homebuyers under the name Richmond American Homes.
The homebuilding operations are in four business segments: West (Arizona, California and Nevada); Mountain (Colorado and Utah); East (Maryland, Virginia and Delaware Valley), and other homebuilding (Florida and Illinois).
The financial services and other segment consists of Home American Mortgage Corp., which originates mortgage loans for the homebuyers; American Home Insurance Agency, Inc., which offers third-party insurance products to the homebuyers, and American Home Title and Escrow Company, which offers title agency services to MDC and homebuyers.
Shares of MDC are down 32 percent over the past year (Jan. 24, 2011 - Jan. 20, 2012). But with a new year comes a new look. MDC shares are up 16 percent year-to-date, closing Friday at $20.50, down three percent for the day.
MDC has a 52-week low of $14.79 and a high of $32.40.
In 2011, the company issued a $0.25 dividend in February, May, August and November.
Disclaimer: This article is provided for information purposes only and should not be used as the basis for any investment decision. I am neither licensed nor qualified to provide investment advice.
Comments