Housing Stocks Are in a Trot: The Home Depot, Inc. (HD), Lowe’s Companies, Inc. (LOW), Hovnanian Enterprises, Inc. (HOV)

Lowe’s Companies, Inc. (NYSE:LOW) also revealed a $5 billion share buyback program, which replaces an existing repurchase program that was already in place and is expected to occur over the next two years.
Perhaps the share buyback will boost forthcoming earnings per share. Lowe’s Companies, Inc. (NYSE:LOW) is predicting fiscal 2013 diluted earnings per share of $2.05 and 4% sales growth in the period.

Home Depot has a trailing price-to-earnings ratio of 23, compared to a trailing P/E of approximately 22 for competitor Lowe’s Companies, Inc. (NYSE:LOW). In recent days, after reporting a 32% increase in its fourth quarter earnings combined with a 14% rise in sales, Home Depot lifted its quarterly dividend by 34% to $0.39 per share, which places the dividend yield at 2.3% compared with a quarterly dividend of $0.16 and a yield of 1.7% at Lowe’s. Between the two stocks, Home Depot has more growth momentum working in its favor.

All in all, the housing sector offers investors a compelling opportunity. The population is rising, home foreclosures and delinquencies are slowing, and homeowners are investing in their properties. At this pace, stocks in this sector have growth potential in 2013.

The article Housing Stocks Are in a Trot originally appeared on Fool.com and is written by Gerelyn Terzo.

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