10 Best Home Builder Stocks To Buy Now

1. D.R. Horton, Inc. (NYSE:DHI)

Number of Hedge Fund Holders: 62

D.R. Horton, Inc. (NYSE:DHI) is an American home construction company that sells homes in 113 markets across 33 states. The company started off with its first home in 1978 and completed over 1,000,000 homes in 2023. Other than homebuilding, the homebuilder offers other services such as mortgage, title, and insurance. The homebuilder has Express Series for first-time homebuyers, Emerald Series for high-end homes, and Freedom Series for easy living and low maintenance. Rental communities for those who cannot own a home are also available.

D.R. Horton, Inc. (NYSE:DHI) has a clear dominance in the home building market as it has been the largest home builder by volume since 2002. The market share dominance is evident from the fact that the company served as the largest builder in 3 of the top 5 US housing markets and in 52 of the 118 markets in which it operated on September 30, 2023. During the trailing twelve months ended June 30, the firm closed 94,255 homes. The diverse product offerings and price points also offer a competitive advantage.

Apart from the market dominance, the track record of commendable financial performance remains strong. The fiscal third quarter of 2024 is a recent proof. The firm recorded earnings of $4.10 per diluted share, up 5% from the prior year period. The consolidated revenues increased 2% to $10.0 billion and consolidated pre-tax income increased 1% to $1.8 billion. Home sales revenues of $9.2 billion were secured on 24,155 homes closed in the quarter. With affordable product offerings and flexible lot supply in a supply-deficient market, D.R. Horton, Inc. (NYSE:DHI) continues to position itself well in the market.

Based on a market-leading position, strong financial performance, and a strategy that aligns with the market demographics, DHI ranks among the 10 best home builder stocks to buy now. The stock was held by 62 hedge funds, as of Q2 2024. Greenhaven Associates was the largest shareholder in the company.

While we acknowledge the potential of DHI as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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