Lennar Corporation (LEN), Toll Brothers Inc (TOL): Are These Housing Plays Still Safe?

Meanwhile, Lennar Corporation (NYSE:LEN) has had its sales predictions for 2013 increased from $5.4 billion at the beginning of the year to $5.9 billion currently, a 9.3% gain.

So, it would appear that the housing market is still strong and both Lennar and Toll Brothers Inc (NYSE:TOL) are set for growth. Additionally, the companies are now cheaper with a better outlook than my original call so it would appear that there is a good opportunity to invest.

What about USG?

Building materials company USG Corporation (NYSE:USG) may not have recovered as fast as the home builders, but the company’s recovery is forecast to gather strength over the rest of the year. Currently, analysts predict that the company will earn $0.18 for the quarter ending June 2013 and $0.25 for the quarter ending September 2013. Overall, the consensus estimate is for the company to earn $0.55 for the full-year 2013 and $1.68 for 2014 — both of which are impressive rates of growth. With these impressive rates of growth, USG looks cheap and trades at a forward P/E ratio of 13 compared to its 10 largest peers, which trade at an average P/E ratio of 22.

Conclusion

Overall, the home builders have rapidly returned to health during the last few months but their performance has been dented during the last few weeks. This could present a perfect opportunity to buy as the housing market remains strong and revenue continues to grow.

So, despite poor performance so far this year, it could be time to get back into these three companies to play the housing recovery.

Fool contributor Rupert Hargreaves has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Are These 3 Housing Plays Still Safe? originally appeared on Fool.com and is written by Rupert Hargreaves.

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