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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:

Legacy Housing (NASDAQ:LEGH) is the top construction stock with a Zen Score of 57, which is 15 points higher than the construction industry average of 42. It passed 18 out of 33 due diligence checks and has strong fundamentals. Legacy Housing has seen its stock lose -18.68% over the past year, underperforming other construction stocks by -17 percentage points.

Legacy Housing has an average 1 year price target of $26.00, an upside of 24.46% from Legacy Housing's current stock price of $20.89.

Legacy Housing stock has a consensus Strong Buy recommendation according to Wall Street analysts. Of the 3 analysts covering Legacy Housing, 66.67% have issued a Strong Buy rating, 0% have issued a Buy, 33.33% have issued a hold, while 0% have issued a Sell rating, and 0% have issued a Strong Sell.

Cavco Industries (NASDAQ:CVCO) is the second best construction stock with a Zen Score of 57, which is 15 points higher than the construction industry average of 42. It passed 19 out of 33 due diligence checks and has strong fundamentals. Cavco Industries has seen its stock lose -1.18% over the past year, overperforming other construction stocks by 1 percentage points.

Cavco Industries has an average 1 year price target of $353.50, an upside of 29.01% from Cavco Industries's current stock price of $274.02.

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.

Kb Home (NYSE:KBH) is the third best construction stock with a Zen Score of 54, which is 12 points higher than the construction industry average of 42. It passed 20 out of 38 due diligence checks and has strong fundamentals. Kb Home has seen its stock lose -4.98% over the past year, underperforming other construction stocks by -3 percentage points.

Kb Home has an average 1 year price target of $37.46, a downside of -5.63% from Kb Home's current stock price of $39.69.

Kb Home stock has a consensus Buy recommendation according to Wall Street analysts. Of the 13 analysts covering Kb Home, 38.46% have issued a Strong Buy rating, 15.38% have issued a Buy, 38.46% have issued a hold, while 7.69% have issued a Sell rating, and 0% have issued a Strong Sell.

Out of 7 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 4.96%, which is 3 percentage points higher than the construction industry average of 1.79%. 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 25.4% indicates that its high dividend yield is sustainable for the long-term.

Kb Home (NYSE:KBH) has an annual dividend yield of 1.51%, which is the same as the construction industry average of 1.79%. 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.

Lennar (NYSE:LEN) has an annual dividend yield of 1.43%, which is the same as the construction industry average of 1.79%. 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 9.5% indicates that its dividend yield is sustainable for the long-term.

Construction stocks were down -2.19% in the last day, and up 3.63% over the last week. Beazer Homes Usa was the among the top losers in the residential construction industry, dropping -11.03% yesterday.

Beazer Homes shares are trading lower after the company reported worse-than-expected Q2 sales results.

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

Dream Finders Homes (NASDAQ:DFH) is the most undervalued construction stock based on WallStreetZen's Valuation Score. Dream Finders Homes has a valuation score of 71, which is 25 points higher than the construction industry average of 46. It passed 5 out of 7 valuation due diligence checks.

Dream Finders Homes's stock has dropped -26.44% in the past year. It has underperformed other stocks in the construction industry by -24 percentage points.

Hovnanian Enterprises (NYSE:HOV) is the second most undervalued construction stock based on WallStreetZen's Valuation Score. Hovnanian Enterprises has a valuation score of 71, which is 25 points higher than the construction industry average of 46. It passed 5 out of 7 valuation due diligence checks.

Hovnanian Enterprises's stock has dropped -25.62% in the past year. It has underperformed other stocks in the construction industry by -23 percentage points.

Kb Home (NYSE:KBH) is the third most undervalued construction stock based on WallStreetZen's Valuation Score. Kb Home has a valuation score of 71, which is 25 points higher than the construction industry average of 46. It passed 5 out of 7 valuation due diligence checks.

Kb Home's stock has dropped -4.98% in the past year. It has underperformed other stocks in the construction industry by -3 percentage points.