3 Home Improvement Stocks Primed to Outperform in the Second Half of 2020

NYSE: SHW | Sherwin-Williams Company (The)  News, Ratings, and Charts

SHW – Sherwin-Williams (SHW), Trex (TREX), and Floor & Decor (FND) are thriving due to the strong housing market. Expect them to continue leading the market higher in the next six months.

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from StockNews.com!

The coronavirus has caused disruptions to various parts of the economy, but it’s lit a fire under the housing market. We’re seeing a surge in demand due to city-dwellers escaping for the suburbs and rural areas. Already, the housing supply is at low levels.

Another bullish factor is the record-low level of mortgage rates. This makes houses more affordable, spurring demand. It’s also supportive of homeowners financing upgrades of their homes and having confidence that their investments will result in increased home values.

The coronavirus is also leading to changes in household spending. It’s shifting away from travel and towards home improvement. As the housing market continues to gain strength, this theme will intensify. These home improvement stocks are well-positioned to thrive in the second half of 2020.

Sherwin-Williams (SHW)

Painting a room or the outside of the house is the simplest and easiest form of home improvement. Additionally, any type of renovation or addition entails new layers of paint. This is a catalyst for SHW given current trends.

Another bullish factor is that the main ingredient of paint is oil. Given that travel is going to be depressed for the rest of the year, demand for oil will be impaired, meaning that prices will be capped.

This creates an ideal situation for SHW. Demand for its product will increase, while the cost of its input is not going to significantly increase. SHW has been one of the best-performing stocks since the housing market decisively bottomed out in 2012, as it’s up more than five-fold since then, while it paid out a dividend higher than the 10-year Treasury note.

SHW’s POWR Ratings are consistent with this outperformance. The stock is rated a “Strong Buy”. It also has an “A” rating across the board in all categories including Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank.

Trex (TREX)

Another aspect of home improvement is by upgrading outdoor living spaces. This is particularly popular with Millennials who place a higher priority on it than previous generations and make up the bulk of new, homebuyers.

One beneficiary of this trend is TREX which makes wood and plastic composite material that is used in making decks. The stock is up more than 100% since the March bottom, and it’s 2% off its all-time high. TREX is growing revenues by 11% while maintaining 42% gross margins.

Trex has an overall POWR Ratings of “B”. It has an “A” rating for Peer Grade and Trade Grade, a “B” rating for Buy & Hold Grade, and a “C” for Industry Rank. It’s ranked the #4 stock in the Industrial – Building Materials group.

Floor & Decor (FND)

FND IPO’d in 2017 since then the stock has been range-bound between $25 and $60. However, the strength in housing could be the catalyst for it to break higher.

(source: Finviz.com)


FND is a multi-channel retailer of flooring products such as tile, wood, laminate, vinyl, and natural stone. The stock is in expansion mode as it expects to expand to 400 stores from its current, 120, over the next five years. It’s currently in a sweet spot as same-store sales are increasing, the number of locations is increasing, and online sales are exploding.

Overall, revenues are increasing by 16% with 42% gross margins. Its stock is 5% off its all-time high. FND’s POWR Ratings are also impressive with an overall “Buy” Rating. It has an “A” in all categories, except for a “B” in Buy and Hold. It’s also ranked #13 in the Home Improvement Goods category.

Want More Great Investing Ideas?

9 “BUY THE DIP” Growth Stocks for 2020

Top 3 Investing Strategies for the Year Ahead

7 “Safe-Haven” Dividend Stocks for Turbulent Times

SHW shares were unchanged in after-hours trading Monday. Year-to-date, SHW has declined -2.53%, versus a -4.48% rise in the benchmark S&P 500 index during the same period.

About the Author: Jaimini Desai

Jaimini Desai has been a financial writer and reporter for nearly a decade. His goal is to help readers identify risks and opportunities in the markets. As a reporter, he covered the bond market, earnings, and economic data, publishing multiple times a day to readers all over the world. Learn more about Jaimini’s background, along with links to his most recent articles. More...

More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
TREXGet RatingGet RatingGet Rating
FNDGet RatingGet RatingGet Rating

Get Free Updates

Join thousands of investors who get the latest news, insights and top rated picks from StockNews.com!

Top Stories on StockNews.com

NYSE: TSM | Taiwan Semiconductor Manufacturing Company Ltd. News, Ratings, and Charts

3 Semiconductor Stocks Set To Rise

The shift to remote work has resulted in increased demand for semiconductors. Taiwan Semiconductor (TSM), ASML (ASML), and Broadcom (AVGO are set to soar.
NASDAQ: AMGN | Amgen Inc. News, Ratings, and Charts

3 Top Biotech Stocks for July

The biotech sector is one of the obvious winners of the coronavirus. Amgen (AMGN), Vertex (VRTX), and Seattle Genetics (SGEN) are the top stock picks for July.
NASDAQ: TSLA | Tesla, Inc. News, Ratings, and Charts

3 Stocks That Are Up More Than 100% This Year

Tesla (TSLA), Zoom (ZM) and Shopify (SHOP) are flying high this year. Find out what’s driving up their prices.
NYSE: ORCL | Oracle Corporation  News, Ratings, and Charts

4 Dividend Stocks to Buy if There is a Second Market Crash

The coronavirus has yet to subside in the US and there are fears about a second wave. Oracle (ORCL), Eli Lilly (LLY), EBay (EBAY) and CoreSite Realty (COR) are four dividend stocks that could be a smart investment if the market sours again.
NYSE: GDX | VanEck Vectors Gold Miners ETF News, Ratings, and Charts

3 Gold Miners To Buy in July

As gold nears all-time highs, Kirkland Lake Gold (KL), Anglogold Ashanti (AU), and Alamos Gold (AGI) should be on your watchlist

Read More Stories

More Sherwin-Williams Company (The) (SHW) News View All

Event/DateSymbolNews DetailStart PriceEnd PriceChangePOWR Rating
Loading, please wait...
View All SHW News