Ford Motor Company (F), General Motors Company (GM): This Industry Is Overheating

The other reason to love Pulte is its stronghold on the retirement community. With Del Webb, Pulte is the major player in the active-adult housing market. This market should begin to accelerate in the future as the baby boomer generation starts to retire.

D.R. Horton, Inc. (NYSE:DHI) is right up there with PulteGroup as an industry leader. D.R.’s June-ended quarter was impressive, with EPS coming in at $0.38 compared to $0.20 for the same period last year. This came as revenue increased 47%.

The home builder saw new home orders and backlogs grow by double digits in the first six months of 2013. Much like Pulte, D.R. is increasing investments in land. This move should give both home builders an advantage when it comes to having supply in key markets.

D.R. Horton, Inc. (NYSE:DHI)’s key segment is the South-Central area of the U.S., which accounts for over 30% of revenue and includes Louisiana, New Mexico, Oklahoma and Texas. Meanwhile, Pulte’s key segment is the Southwest, which is focused on Arizona, Nevada and Southern California.

Bottom line

Although the U.S. auto industry might be peaking, I still think the housing industry has room to move higher. The major U.S. car companies, Ford and GM, are looking to make their way into international markets to help further drive growth, but I would play a wait-and-see game with these. But the major home builders, PulteGroup and D.R. Horton, are offering investors solid investment opportunities in the U.S.

Marshall Hargrave has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors (NYSE:GM). The Motley Fool owns shares of Ford.

The article This Industry Is Overheating originally appeared on Fool.com and is written by Marshall Hargrave.

Marshall is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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