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Best Construction Stocks to Buy Now (2023)

Top construction stocks in 2023 ranked by overall Zen Score. See the best construction stocks to buy now, according to analyst forecasts for the residential construction industry.

According to Zen Score, the 3 best construction stocks to buy right now are:

Cavco Industries (NASDAQ:CVCO) is the top construction stock with a Zen Score of 57, which is 14 points higher than the construction industry average of 43. It passed 19 out of 33 due diligence checks and has strong fundamentals. Cavco Industries has seen its stock return 21.76% over the past year, underperforming other construction stocks by -8 percentage points.

Cavco Industries has an average 1 year price target of $381.50, an upside of 40.8% from Cavco Industries's current stock price of $270.95.

Cavco Industries stock has a consensus Buy recommendation according to Wall Street analysts. Of the 2 analysts covering Cavco Industries, 0% have issued a Strong Buy rating, 100% have issued a Buy, 0% have issued a hold, while 0% have issued a Sell rating, and 0% have issued a Strong Sell.

Legacy Housing (NASDAQ:LEGH) is the second best construction stock with a Zen Score of 53, which is 10 points higher than the construction industry average of 43. It passed 16 out of 33 due diligence checks and has strong fundamentals. Legacy Housing has seen its stock return 24.01% over the past year, underperforming other construction stocks by -5 percentage points.

Legacy Housing has an average 1 year price target of $25.50, an upside of 26.93% from Legacy Housing's current stock price of $20.09.

Legacy Housing stock has a consensus Buy recommendation according to Wall Street analysts. Of the 2 analysts covering Legacy Housing, 50% have issued a Strong Buy rating, 0% have issued a Buy, 50% have issued a hold, while 0% have issued a Sell rating, and 0% have issued a Strong Sell.

Kb Home (NYSE:KBH) is the third best construction stock with a Zen Score of 53, which is 10 points higher than the construction industry average of 43. It passed 20 out of 38 due diligence checks and has strong fundamentals. Kb Home has seen its stock return 33.76% over the past year, overperforming other construction stocks by 4 percentage points.

Kb Home has an average 1 year price target of $45.36, a downside of -0.71% from Kb Home's current stock price of $45.68.

Kb Home stock has a consensus Buy recommendation according to Wall Street analysts. Of the 7 analysts covering Kb Home, 42.86% have issued a Strong Buy rating, 0% have issued a Buy, 57.14% have issued a hold, while 0% have issued a Sell rating, and 0% have issued a Strong Sell.

Out of 8 construction stocks that have issued dividends in the past year, the 3 construction stocks with the highest dividend yields are:

Mdc Holdings (NYSE:MDC) has an annual dividend yield of 4.7%, which is 3 percentage points higher than the construction industry average of 1.47%. Mdc Holdings's dividend payout is not stable, having dropped more than 10% one times in the last 10 years. Mdc Holdings's dividend has shown consistent growth over the last 10 years.

Mdc Holdings's dividend payout ratio of 29.1% indicates that its dividend yield is sustainable for the long-term.

Lennar (NYSE:LEN) has an annual dividend yield of 1.34%, which is the same as the construction industry average of 1.47%. Lennar's dividend payout is stable, having never dropped by more than 10% in the last 10 years. Lennar's dividend has shown consistent growth over the last 10 years.

Lennar's dividend payout ratio of 9.3% indicates that its dividend yield is sustainable for the long-term.

Kb Home (NYSE:KBH) has an annual dividend yield of 1.31%, which is the same as the construction industry average of 1.47%. Kb Home's dividend payout is not stable, having dropped more than 10% one times in the last 10 years. Kb Home's dividend has shown consistent growth over the last 10 years.

Kb Home's dividend payout ratio of 6.4% indicates that its dividend yield is sustainable for the long-term.

Construction stocks were up 2.83% in the last day, and up 1.9% over the last week. Green Brick Partners was the among the top gainers in the residential construction industry, gaining 4.07% yesterday.

Shares of companies in the broader discretionary sector are trading higher amid overall market strength on renewed economic optimism following US Senate passage of a debt limit bill and strong US jobs data. Economic optimism could lift consumer spending outlook.

Based on WallStreetZen's Valuation Score, the 3 most undervalued construction stocks right now are:

Legacy Housing (NASDAQ:LEGH) is the most undervalued construction stock based on WallStreetZen's Valuation Score. Legacy Housing has a valuation score of 86, which is 37 points higher than the construction industry average of 49. It passed 6 out of 7 valuation due diligence checks.

Legacy Housing's stock has gained 24.01% in the past year. It has underperformed other stocks in the construction industry by -5 percentage points.

Century Communities (NYSE:CCS) is the second most undervalued construction stock based on WallStreetZen's Valuation Score. Century Communities has a valuation score of 71, which is 22 points higher than the construction industry average of 49. It passed 5 out of 7 valuation due diligence checks.

Century Communities's stock has gained 24.84% in the past year. It has underperformed other stocks in the construction industry by -5 percentage points.

Hovnanian Enterprises (NYSE:HOV) is the third most undervalued construction stock based on WallStreetZen's Valuation Score. Hovnanian Enterprises has a valuation score of 71, which is 22 points higher than the construction industry average of 49. It passed 5 out of 7 valuation due diligence checks.

Hovnanian Enterprises's stock has gained 55.94% in the past year. It has overperformed other stocks in the construction industry by 27 percentage points.