Meritage Homes Corp (MTH): Don’t Shy Away From This Housing Stock

Meanwhile, D.R. Horton, Inc. (NYSE:DHI) is having a fantastic year and doubled its earnings in the second quarter. The sales and earnings momentum is expected to continue throughout the year. It reports its third quarter results later this month. The company went into the quarter with a solid backlog position, 76% higher than last year. It is also noting a good increase in pricing power, something that was non-existent in past years.

The recent downtrend in all three stocks over the last month or so has provided a good buying opportunity, and all the three stocks deserve consideration. Meritage Homes Corp (NYSE:MTH) has an added attraction in the form of its cheapest valuation among the three, while its growth prospects are no lesser than the remaining two. Meritage has a forward P/E of 11.26 while Standard Pacific Corp. (NYSE:SPF) has 14.02 and D.R. Horton, Inc. (NYSE:DHI) has 11.93.

Last word

Meritage is well positioned in key markets to take advantage of the strong housing demand. The gap between demand and supply of homes will keep the momentum going in residential construction markets, particular for builders focused on middle income groups. Management has given solid guidance on future prospects about the company. Its attractive valuation is another incentive for investors to consider this stock.

The article Don’t Shy Away From This Housing Stock originally appeared on Fool.com.

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