The home improvement industry is growing due to rising home prices and aging housing stock, prompting homeowners to invest in renovations rather than buying new properties. Thus, investors could consider adding fundamentally sound home improvement stocks, such as Haverty Furniture Companies, Inc. (HVT) and Tile Shop Holdings, Inc. (TTSH), which are hammering big gains.
Rapid urbanization and the growing demand for modern, smart homes are key drivers of the home improvement market. As cities grow and the standard of living improves, there is a greater demand for homes that incorporate cutting-edge technology and modern design. The home Improvement market is estimated to grow at a CAGR of 6% between 2024 and 2032.
Additionally, rising home prices and aging housing stock are encouraging more homeowners to invest in improvements rather than purchasing new homes. The growing emphasis on eco-friendly products and energy-efficient renovations, supported by government incentives, will further boost the industry's growth, making it a promising sector for both consumers and businesses alike.
Considering these factors, let’s take a look at the fundamentals of the two Home Improvement & Goods industry picks, starting with number 2.
Stock #2: Haverty Furniture Companies, Inc. (HVT)
HVT operates as a specialty retailer of residential furniture and accessories in the United States. The company offers furniture merchandise under the Havertys brand name.
The stock’s trailing-12-month gross profit margin of 61.03% is 64.1% higher than the industry average of 37.19%. Similarly, its 4.91% trailing-12-month net income margin is 7.4% above the industry average of 4.57%.
HVT’s sales for the fiscal second quarter ended June 30, 2024, stood at $178.60 million. Its gross profit was reported at $107.98 million and net income at $4.44 million. Additionally, the company’s earnings per share was reported at $0.27.
Analysts expect HVT’s revenue for the first quarter (ending March 2025) to increase 5.1% year-over-year to $193.42 million, while its EPS is expected to grow 226.2% year-over-year to $0.46 for the same quarter.
Over the past month, the stock has gained 1.6% to close the last trading session at $25.98.
HVT’s robust fundamentals are reflected in its POWR Ratings. Its overall rating is B, which equates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Value and a B for Quality. HVT is ranked #22 out of 57 stocks in the B-rated Home Improvement & Goods industry.
Beyond what is stated above, we’ve also rated HVT for Stability, Growth, Sentiment, and Momentum. Get all HVT ratings here.
Stock #1: Tile Shop Holdings, Inc. (TTSH)
TTSH operates as a specialty retailer of natural stone and man-made tiles, setting and maintenance materials, and related accessories in the United States. The company offers natural stone products, including marble, travertine, granite, quartz, sandstone, slate, and onyx tiles, and man-made products, which comprise ceramic, porcelain, glass, cement, wood look, metal, and luxury vinyl tile.
The stock’s trailing-12-month gross profit margin of 65.30% is 75.6% higher than the industry average of 4.99%. Similarly, its 8.26% trailing-12-month levered FCF margin is 65.6% above the industry average of 5.01%.
TTSH’s net sales for the fiscal second quarter ended June 30, 2024, were reported at $91.38 million. It reported an adjusted EBITDA of $6.73 million. Additionally, the company’s net income came in at $1.22 million or $0.03 per share, respectively.
Over the past month, the stock has gained 7.8%, closing the last trading session at $6.39.
TTSH’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which translates to Buy in our proprietary rating system. TTSH has a B grade for Quality. It is ranked #8 out of 57 stocks in the same industry.
Click here to access the additional TTSH ratings (Momentum, Stability, Sentiment, and Value).
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TTSH shares were trading at $6.49 per share on Wednesday afternoon, up $0.10 (+1.56%). Year-to-date, TTSH has declined -11.82%, versus a 22.41% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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