The dramatic pandemic-induced shift in lifestyles and consumer preferences has led to much greater home improvement activity by people. Home improvement projects to re-organize and repurpose existing living spaces has now become de rigueur. And even though more than 50% American adults are now fully vaccinated against COVID-19, people are still spending more time indoors and are redecorating their spaces according to their needs.
This is driving a substantial surge in demand for home appliances. In fact, the global home appliance market size is expected to grow at a 6.1% CAGR over the next five years to hit $932.4 million by the end of 2026.
Rising disposable income and rapid urbanization should further accelerate the growth of the home appliance industry. As consumers continue to choose home appliances that are equipped with advanced technological features and modern looks, we think companies such as Whirlpool Corporation (WHR) and Conn’s, Inc. (CONN), which are investing heavily in developing innovative products, are uniquely positioned to benefit. So, it could be wise to bet on these stocks now.
Whirlpool Corporation (WHR)
WHR is the world’s leading kitchen and laundry appliance company. Its principal products include refrigerators, freezers, laundry appliances and related laundry accessories, cooking and other small domestic appliances, dishwasher appliances and related accessories. The company markets Whirlpool, KitchenAid, Maytag, Consul, Brastemp, Amana, Bauknecht, JennAir, Indesit and other major brand names in nearly every country in the world.
Last month, WHR began its plan to invest $15 million into its factory in Tulsa, Oklahoma. The Initiative should further strengthen its U.S. manufacturing capabilities and bring even more innovative products, thereby leading to increased sales.
WHR’s net sales grew 23.8% year-over-year to $5.36 billion in the first quarter ended March 31, 2021. The company’s operating profit increased 135% year-over-year and came in at $618 million. WHR reported $433 million in net earnings during this period, representing an 181.2% increase year-over-year. Its EPS increased 178% year-over-year to $0.61 for the period.
Analysts expect WHR’s revenue to increase 41.5% year-over-year to $5.05 billion in the current quarter ending June 2021. The company’s EPS is expected to increase 175.8% year-over-year to $5.93 in the current year. The stock has gained 92.2% over the past year.
WHR’s POWR Ratings reflect this promising outlook. The company has an overall B rating, which translates to Buy in our proprietary ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock is rated an A for Growth and Momentum and a B for Value. Within the A-rated Home Improvement & Goods industry, it is ranked #17 of 63 stocks. To see additional POWR Ratings for Sentiment, Stability and Quality for WHR, Click here.
Conn’s, Inc. (CONN)
CONN is a specialty retailer of durable consumer goods and related services. It operates through two segments, Retail and Credit. The company’s stores offer furniture and mattresses, accessories for the living room, and home appliances that include refrigerators, freezers, and washers. In addition, it provides consumer electronics and home office products that include computers, printers, and accessories.
Last month, CONN expanded into the Ocala, Florida market by opening a new Conn’s HomePlus showroom that showcases a variety of furniture, mattresses, top-of-the-line appliances, consumer electronics and home office products. Its entry into the Ocala market should drive sales growth.
In its fiscal fourth quarter, ended January 31,CONN’s total costs decreased 12.6% year-over-year to $340.50 million. The company’s net income increased 397.6% year-over-year to $25.13 million. It reported an EPS of $0.85 for the quarter, compared to an EPS of $0.17 in the prior-year quarter.
Analysts expect CONN’s EPS to increase 115.9% year-over-year to $0.3 in the current quarter, ended April 2021. Its revenue is expected to increase 7.6% year-over-year to $1.42 billion in its fiscal year 2023. The stock has gained 233.3% over the past year.
It is no surprise that CONN has an overall grade of B, which equates to Buy in our POWR ratings system. It also has an A grade for Momentum, and a B grade for Value and Quality. Of 36 stocks in the B-rated Specialty Retailers industry, it is ranked #7.
In total, we rate CONN on eight different levels. Beyond what we’ve stated above, we have also given CONN grades for Stability, Sentiment and Value. Get all the CONN ratings here.
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WHR shares were trading at $237.32 per share on Wednesday afternoon, down $0.51 (-0.21%). Year-to-date, WHR has gained 33.12%, versus a 12.66% rise in the benchmark S&P 500 index during the same period.
About the Author: Samiksha Agarwal
Samiksha Agarwal has always had a keen interest in financial markets. This has led her to a career as a financial journalist. Through her extensive knowledge of fundamental analysis, her goal is to help investors identify untapped investment opportunities in the stock market. More...
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