In this article, we will discuss: 10 Best Home Appliance Stocks to Invest in.
The global home appliances market, estimated by Fortune Business Insights to be worth $708.15 billion in 2023, is expected to expand at a CAGR of 6.20% from $743.56 billion in 2024 to $1,203.11 billion by 2032. In terms of market share, North America accounted for 32.51% of the home appliances market in 2023.
The market is expanding more quickly due to consumer demand for energy-efficient and technologically advanced home appliances. A Parks Associates consumer survey in 2022 shows that 38% of homes own one or more smart home devices, which represents a slight 2% rise from the previous year. In 2021, about 30% of customers bought a smart home gadget, and 44% of US households wanted to do the same in 2023. Consumer interest in the expanding array of Internet-connected gadgets, such as energy management programs and smart home security systems, is still high. The user experience is further enhanced by improved mobile integration.
Parks Associates research director Chris White pointed out how customer expectations are rising and how demand for integrated smart home experiences is expanding. Out of 10,000 houses that participated in the survey, 88% had access to the Internet, 54% had a connected health device, 40% had a security system, and 56% had a smart TV. However, concerns about security and connectivity are growing among manufacturers as more devices find their way into homes and offices.
Secondly, instead of using traditional middlemen, more and more consumers are opting to purchase directly from manufacturers of household appliances. According to PWC’s June 2023 Global Consumer Insights Pulse Survey, the majority of customers (63%) report having bought products straight from a brand’s website and anticipate this percentage to rise. Another 29% of consumers state that, while they haven’t done so yet, they are thinking about going direct-to-consumer.
Another study by J.D. Power 2023 named U.S. Appliance Satisfaction Study reveals that 75% of appliance purchases occur on the first visit to the store and that nearly three-fourths (71%) of home appliance transactions take place in-store. Even with 29% of purchases made online, the majority of consumers still prefer to see the equipment in person.
Last year Christina Cooley, home intelligence lead at J.D. Power, stated:
“This year’s data shows us that 56% of home appliance shoppers are doing their research online before heading in store to purchase,” “Though price is almost always going to be the main driver of whether someone decides to purchase an appliance or not, one-third of buyers did not purchase because they were seeking specific options and features, and one-fifth indicated they couldn’t purchase, as their desired appliance wasn’t in stock.”
According to the American Customer Satisfaction Index Household Appliance and Electronics Study of 2024, with slight drops in both product and service quality, the household appliance market—which includes washers, dryers, dishwashers, refrigerators, ranges/cooktops/ovens, and over-the-range microwaves—falls 1% to an ACSI score of 80. The only appliances that have grown year over year are dishwashers and refrigerators (both up 1% to 80), with the range/oven/cooktop category seeing the largest loss, falling 4% to 79.
Jamie Rosenberg, Associate Director – Global Household and Personal Care, stated:
“The impact of inflation on the major household appliance market is both profound and complex. Many low-income consumers are delaying upgrades, but for 54% of buyers, breakdowns are the biggest purchase driver. When that happens, demand is relatively inelastic. When we add the impact of mid- to upper-income consumers who are still unleashing pent-up demand from supply constraints over the past three years, we have a market growth rate that is well above normal. Looking ahead, connected appliance innovations that create a convergence of reduced operating costs, and enhanced performance, convenience and sustainability will drive a new wave of trading up that keeps market growth high over the next five years.”
With that said, here are the 10 Best Home Appliance Stocks to Invest in.
Copyright: johnkasawa / 123RF Stock Photo
Methodology:
We sifted through holdings of home appliance ETFs and online rankings to form an initial list of 20 home appliance stocks. Then we selected the 10 stocks that were the most popular among institutional investors. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q2 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here)
10. iRobot Corporation (NASDAQ:IRBT)
Number of Hedge Fund Holders: 17
The consumer robot firm iRobot Corporation (NASDAQ:IRBT) is situated in the United States. It creates and manufactures robots that help customers find solutions for tasks that need to be completed both inside and outside of the house. It offers a range of consumer robot solutions, including cleaning, navigation and mapping, physical solutions, and human-robot interaction. The company is involved in the consumer robots business category. Consumer robot items are sold to customers by online retailers and stores. iRobot Corporation (NASDAQ:IRBT) sells its products to generate revenue. It markets the products both domestically and internationally.
In 2024, the company underwent a significant restructuring that put it on a solid trajectory for recovery and future expansion. The maker of the well-known Roomba vacuuming robot and Braava mopping robot has made a name for itself in the consumer electronics industry. The firm is taking proactive measures to strengthen its financial position despite difficulties in Q2 2024, which include a 30% YoY fall in revenue because of a more difficult consumer spending environment, more competition in our market area, and a larger-than-expected impact from foreign currency.
Its restructuring plan also focuses on stabilizing the business in the existing market to increase profitability and grow in the mid-tier and premium segments after completing its merger with Amazon.
Focusing on labor reductions and effective marketing, iRobot Corporation (NASDAQ: IRBT) decreased operational expenses by 28% YoY in Q2 2024 under CEO Gary Cohen. Though profits were negatively impacted by a one-time charge, the company is expected to recover as new products like the Roomba Combo 10 Max are introduced. iRobot is well-positioned for long-term growth in the consumer electronics industry with planned product redesigns in 2025.
E. Shaw’s D E Shaw is one of the top shareholders in the company, with 321,600 shares worth $2.93 million.
9. Whirlpool Corporation (NYSE:WHR)
Number of Hedge Fund Holders: 24
Whirlpool Corporation (NYSE:WHR) is a producer and distributor of household appliances and related products. Five operating segments comprise its reportable segments: Small Domestic Appliances (SDA), MDA Europe, MDA Latin America, MDA Asia, and Domestic Appliances (MDA) North America. Product categories include cooking, dishwashing, laundry, and refrigeration. Small household appliances, such as the KitchenAid stand mixer, are among the company’s offerings. Whirlpool, KitchenAid, Maytag, Consul, and Brastemp are a few of the company’s international brands.
As seen by its Q2 2024 earnings report, Whirlpool Corporation (NYSE:WHR), a prominent producer of home appliances, has been resilient in the face of a difficult financial environment. The company has shown its strong operational capabilities by driving sequential global margin increases. Whirlpool’s continuous EBIT margin of 5.3% is a 100 basis point improvement over the prior quarter and is indicative of the company’s successful efforts to regain its margins.
Due to its strong brand portfolio and effective pricing in North America, the company was able to increase margins despite a decline in discretionary demand. It is anticipated that cost-control measures combined with double-digit revenue growth in Latin America and Asia will save $300–$400 million. In Q4 2024, the company hopes to achieve a 7.5% exit margin and $12 in ongoing EPS. Its goals are driven by the launch of new products, a healthy cash flow of $500 million, dividend payments to shareholders, and debt reduction.
Whirlpool Corporation (NYSE:WHR) is well-positioned to benefit from the demand rebound once the housing market ultimately recovers because of its robust product pipeline and innovative approach.
Paul Marshall and Ian Wace’s Marshall Wace LLP is one of the biggest shareholders in the company, with 719,490 shares worth $73.53 million.
8. Spectrum Brands Holdings, Inc. (NYSE:SPB)
Number of Hedge Fund Holders: 30
Spectrum Brands Holdings, Inc. (NYSE:SPB) is a manufacturer and distributor of consumer goods and household necessities. The Home and Garden (H&G), Global Pet Care (GPC), and Home and Personal Care (HPC) segments make up the company. The H&G division includes cleaning supplies, insect control, and home and garden businesses. The HPC section includes the market for small kitchen and personal hygiene appliances.
Home appliances under the brands Black & Decker, Russell Hobbs, George Foreman, PowerXL, Emeril Legasse, Copper Chef, Toastmaster, Juiceman, Farberware, and Breadman, as well as personal care products under the Remington brand, are offered by the Home and Personal Care section.
It produces, markets, and ships its goods to North America, Europe, Latin America, Africa, and the Middle East.
The company reported revenue of $779.4 million for the third quarter of 2024, which was 6% YoY higher than the consensus estimate of $755.33 million. CEO David Maura reports that favorable year-to-date net sales growth is the result of strong operating momentum across all divisions. From the prior year, the gross margin climbed by 310 basis points to 38.9%. Adjusted EBITDA, which excludes investment income, was $93.6 million following a $23 million investment in brand and innovation. Net income rose to $191.3 million YoY. After deducting investment income, adjusted EBITDA margins came in at 12.0%, while net income margins increased by 2.5% annually. The company now forecasts adjusted EBITDA growth of about 20% for the whole year.
Canaccord Genuity’s Brian McNamara raised the price objective to $91, although they kept his Hold rating on Spectrum Brands. The Hold rating was issued due to worries about declining margins and the requirement for continuous sales growth, despite robust Q3 sales and e-commerce growth. Even if the company’s updated adjusted EBITDA projection is positive, the analyst is still concerned about the profitability of the company going forward.
Despite this, Spectrum Brands Holdings, Inc. (NYSE:SPB) is a well-known player in the home appliance market and boasts a sound financial position.
7. Modine Manufacturing Company (NYSE:MOD)
Number of Hedge Fund Holders: 31
Modine Manufacturing Company (NYSE:MOD) offers a range of markets-and-clients-heat-management solutions. It provides auxiliary cooling products such as power steering and transmission oil coolers, as well as powertrain cooling assemblies, radiators, condensers, and charge air coolers. The company also sells dryers, modular chillers, air handlers, furnaces, perimeter heating products, cabinet unit heaters, and fin tube radiators.
The shares of Modine Manufacturing Company (NYSE:MOD) have experienced an impressive rise of more than 122% year-to-date. The advantages of AI infrastructure upcycling were primarily responsible for this growth. In response to rising demand, the company expanded its manufacturing capacity and data center cooling solutions. Its focus on high-potential enterprises and technology roadmap should continue to be positive factors driving the AI data center market’s growth in the future.
With strong first-quarter 2025 results that exceeded forecasts, the company was able to improve its fiscal outlook for FY 2025. Its gross margin improved by 400 basis points to 24.6% YoY, while its gross profit increased by 27% to $162.6 million YoY. This was mainly because of gains from ongoing 80/20 initiatives, greater average selling prices, lower material costs, and a positive sales mix.
Data centers and stationary power generation are two of its high-growth, high-margin business segments. The firm expects data center sales to expand in the range of 80%-90%, which is a considerable increase from its previous projection of 60% to 70%.
Following the company’s recent analyst-day event, DA Davidson analyst Matt Summerville lifted the firm’s price target for Modine Manufacturing from $140 to $155 and maintained a Buy rating on the shares. The analyst tells investors in a research note that the firm is still very bullish about Modine’s overall outlook, citing the company’s recent acquisition of its third large hyperscale customer, its apparent progress on gaining additional hyper and major colo provider wins, its recent liquid product launches, and its ongoing GenSet and E-Mobility platform awards.
Mario Gabelli’s GAMCO Investors is among the largest shareholders in the company, with 1,387,023 shares worth $138.97 million.
6. Best Buy Co., Inc. (NYSE:BBY)
Number of Hedge Fund Holders: 37
Best Buy Co., Inc. (NYSE:BBY) holds a substantial 8.3% market share in North America and over 33% in offline sales, making it the largest pure-play consumer electronics retailer in the US with combined sales of $43.5 billion in 2023. The majority of the company’s sales are made in-store, and its three biggest product categories are computers, appliances, and smartphones and tablets. The COVID-19 pandemic has prompted recent investments in e-commerce fulfillment, which have caused the US e-commerce channel to nearly double from pre-pandemic levels. Going forward, management projects that this channel will account for between 20 and 30 percent of sales.
Analysts think Best Buy is doing enough to maintain its competitive edge in the very competitive consumer electronics market. The company intends to invest in new revenue streams, keep reimagining its in-store experience, and give priority to its digital platforms going forward.
In Q2 2024, comparable sales for tablets and computers increased by 6% YoY, offsetting drops for appliances, home theater, and video games. Sales and customer engagement were increased through well-planned promotional events, such as July’s Black Friday.
Strong omnichannel operations helped to sustain online sales, which were steady at 32% of domestic revenue growth YoY. Despite projecting a 1.5%-3% drop in yearly sales, Best Buy increased its EPS outlook for the year, demonstrating its confidence in continued stability and growth.
Following its Q2 2024 earnings beat, DA Davidson raised its price objective for the company to $117 from $95 and maintained a Buy rating on the shares. The analyst states that the company’s domestic comps continue to trend positively, with the decline of 2.3% better than the 6.3% decline YoY, better than the projection of 3.0% decline, and also its best performance since Q4 of FY21. Together with Walmart and Target, Best Buy Co., Inc. (NYSE:BBY) is the only big box retailer covered this earnings season to have achieved the “triple crown” of beating revenue estimates, beating earnings estimates, and raising outlook.
E. Shaw’s D E Shaw is one of the largest shareholders in the company, with 2,758,784 shares worth $232.54 million.
5. Williams-Sonoma, Inc. (NYSE:WSM)
Number of Hedge Fund Holders: 39
Williams-Sonoma, Inc. (NYSE:WSM) is a $300-billion-domestic-home-category and $450-billion-international-home-market leader with a retail and direct-to-consumer presence. The company is concentrating on increasing its exposure in the B2B ($80 billion total addressable market), marketplace, and franchise categories. Pottery Barn (184 stores) sells casual home accessories, while Williams-Sonoma (156 stores) offers high-end cooking supplies. For young professionals, West Elm (121 stores) is a new concept, and Rejuvenation (11 stores) sells lighting and household items. Mark & Graham and Greenrow are examples of brand extensions, as are Pottery Barn Kids and PBteen (45 stores). Additionally, the company offers a business-to-business division that provides help for both home and large-scale commercial projects.
In the $80 billion US business-to-business market and the $750 billion worldwide home industry, Williams-Sonoma, Inc. (NYSE:WSM) has carved out a little niche for itself. The majority of its brands have historically been introduced naturally by the company into underserved markets, which has helped to raise some brand awareness and promote both top and bottom-line growth. Customer loyalty and astute marketing and merchandising are key components of its business-driving strategy, and the company benefits from a vast archive of customer analytics dating back to its catalog days. Its efforts to penetrate adjacent categories should be aided by this in maintaining its market dominance.
Max Rakhlenko, an analyst with TD Cowen, raised the company’s price objective for WSM from $150 to $160 while maintaining a buy recommendation for the company’s shares. The furniture industry is expected to face substantial challenges in the near future, but the company is optimistic about its medium-term prospects due to its improved operational performance and stronger business than it was before the pandemic, when it was dependent on self-inflicting promotions.
West Elm Kids, Emerging Brands, and B2B development are some of Williams-Sonoma’s growth drivers that Jonathan Matuszewski highlighted. These initiatives might increase EPS and result in a P/E re-rating. Despite great profitability, the company trades at a 20% discount to peers with higher margins, which is consistent with a buy rating.
Despite a 3.3% YoY decline in comparable brand revenue in Q2 2024, the firm raised its operating margin estimate to reach between 17.4% and 17.8%.
Leonard Green’s Leonard Green & Partners is among the largest shareholders in the company, with 3,224,030 shares worth $455.18 million.
