Fortune Brands Home & Security Inc (FBHS), Mueller Water Products, Inc. (MWA): Housing-Sector Stocks Still Have Room for Growth

Sherwin-Williams Company (NYSE:SHW) accumulates approximately 75% of its earnings from commercial and residential renovation construction. The company is another housing-sector stock of which the price has taken off recently, but like nearly all stocks in the industry, an investor’s buy would be a momentum play.

The stock price has increased from nearly $75 per share midway through 2011 to around $183 today. Since 2010, revenue has advanced by nearly 35%. Sherwin-Williams Company (NYSE:SHW) is also expected to profit from many homeowners who had put off property maintenance because they weren’t able to afford it. But that’s gradually changing.

With more homeowners counting their disposable income as they look at rotting decks or outdated cabinets, they may choose to spend that extra money on renovations, and that is where Sherwin will profit. The company is so confident of that fact that it increased its dividend by 7% recently.

Time to celebrate

With two leading American banks saying home prices will climb in 2013, it may be time to chill the champagne. Bank of America Corp (NYSE:BAC) anticipated in a report entitled “Someone Say House Party?” that home values will increase by 8% this year. And JPMorgan Chase & Co. (NYSE:JPM) estimates a 7% increase this year and twice that pace in 2015.

That means that while last year’s likely bottom would have been the ideal time to buy a stock weighted in the housing sector, right now might not be too late, especially due to the recent dip from April’s blip. The pent-up demand for housing is getting ready to explode, so bring out the champagne glasses.

The article Housing-Sector Stocks Still Have Room for Growth originally appeared on Fool.com and is written by Phillip Woolgar.

Phillip Woolgar has no position in any stocks mentioned. The Motley Fool recommends Sherwin-Williams. Phillip 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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