Sectors & IndustriesConsumer CyclicalResidential Construction

Best Construction Stocks to Buy Now (2026)

Top construction stocks in 2026 ranked by overall Zen Rating. "A" Rated stocks have returned an average of +28.50% per year, and are the best construction stocks to buy now. Learn More.

According to Zen Ratings, our proprietary rating system that evaluates 115 factors proven to drive growth in stocks and assigns each stock in our system an overall letter grade as well as 7 individual Component Grades for Value, Growth, Momentum, Sentiment, Safety, Financials, and proprietary AI algorithms, the 3 best construction stocks to buy right now are:

Legacy Housing (NASDAQ:LEGH) is the #1 top construction stock out of 19 with a Zen Rating of A. Stocks with a rating of A have had an average return of +28.5% per year. Learn more.

The Component Grade breakdown for Legacy Housing (NASDAQ:LEGH) is: Value: B, Growth: C, Momentum: C, Sentiment: A, Safety: C, Financials: B, and AI: B.

Legacy Housing (NASDAQ:LEGH) has a Due Diligence Score of 47, which is 15 points higher than the construction industry average of 32.

LEGH passed 14 out of 33 due diligence checks and has strong fundamentals. Legacy Housing has seen its stock return 26.41% over the past year, overperforming other construction stocks by 46 percentage points.

Installed Building Products (NYSE:IBP) is the #2 top construction stock out of 19 with a Zen Rating of C. Stocks with a rating of C have had an average return of +5.11% per year. Learn more.

The Component Grade breakdown for Installed Building Products (NYSE:IBP) is: Value: C, Growth: C, Momentum: D, Sentiment: D, Safety: A, Financials: A, and AI: C.

Installed Building Products (NYSE:IBP) has a Due Diligence Score of 40, which is 8 points higher than the construction industry average of 32.

IBP passed 15 out of 38 due diligence checks and has average fundamentals. Installed Building Products has seen its stock lose -22.89% over the past year, underperforming other construction stocks by -4 percentage points.

Installed Building Products has an average 1 year price target of $226.67, an upside of 22.23% from Installed Building Products's current stock price of $185.44.

Installed Building Products stock has a consensus Hold recommendation according to Wall Street analysts. Of the 9 analysts covering Installed Building Products, 22.22% have issued a Strong Buy rating, 0% have issued a Buy, 66.67% have issued a hold, while 0% have issued a Sell rating, and 11.11% have issued a Strong Sell.

Horton D R (NYSE:DHI) is the #3 top construction stock out of 19 with a Zen Rating of C. Stocks with a rating of C have had an average return of +5.11% per year. Learn more.

The Component Grade breakdown for Horton D R (NYSE:DHI) is: Value: C, Growth: C, Momentum: D, Sentiment: D, Safety: B, Financials: B, and AI: C.

Horton D R (NYSE:DHI) has a Due Diligence Score of 48, which is 16 points higher than the construction industry average of 32.

DHI passed 17 out of 38 due diligence checks and has strong fundamentals. Horton D R has seen its stock lose -10.91% over the past year, overperforming other construction stocks by 8 percentage points.

Horton D R has an average 1 year price target of $158.60, an upside of 17.59% from Horton D R's current stock price of $134.88.

Horton D R stock has a consensus Hold recommendation according to Wall Street analysts. Of the 11 analysts covering Horton D R, 18.18% have issued a Strong Buy rating, 9.09% have issued a Buy, 63.64% have issued a hold, while 9.09% 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:

Meritage Homes (NYSE:MTH) has an annual dividend yield of 3.18%, which is 1 percentage points higher than the construction industry average of 1.9%. Meritage Homes's dividend payout is stable, having never dropped by more than 10% in the last 10 years. Meritage Homes's dividend has shown consistent growth over the last 10 years.

Meritage Homes's dividend payout ratio of 37.7% indicates that its dividend yield is sustainable for the long-term.

Lennar (NYSE:LEN) has an annual dividend yield of 2.61%, which is 1 percentage points higher than the construction industry average of 1.9%. 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 37.9% indicates that its dividend yield is sustainable for the long-term.

Kb Home (NYSE:KBH) has an annual dividend yield of 2.32%, which is the same as the construction industry average of 1.9%. 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 27.5% indicates that its dividend yield is sustainable for the long-term.

Construction stocks were down -1.81% in the last day, and down -2.7% over the last week.

We couldn't find a catalyst for why construction stocks are down.

Based on the Valuation rating, one of the 7 components of a stocks overall Zen Ratings grade, which evaluates factors including estimated earnings yield, earnings before interest and taxes/enterprise value, cash flow yield, free cash flow to price, and price-to-earnings growth (PEG ratio), the 3 most undervalued construction stocks right now are:

Toll Brothers (NYSE:TOL) is the most undervalued construction stock based on its Valuation Rating of A. Valuation is one of 7 Component Grades used to calculate the overall Zen Rating.

Toll Brothers has a valuation score of 29, which is -2 points higher than the construction industry average of 31. It passed 2 out of 7 valuation due diligence checks. Although this number is below the industry average, our proven quant model rates TOL a Valuation Rating of "A".

Toll Brothers's stock has gained 3.42% in the past year. It has overperformed other stocks in the construction industry by 23 percentage points.

M/I Homes (NYSE:MHO) is the second most undervalued construction stock based on its Valuation Rating of B. Valuation is one of 7 Component Grades used to calculate the overall Zen Rating.

M/I Homes has a valuation score of 43, which is 12 points higher than the construction industry average of 31. It passed 3 out of 7 valuation due diligence checks.

M/I Homes's stock has dropped -3.83% in the past year. It has overperformed other stocks in the construction industry by 15 percentage points.

Pultegroup (NYSE:PHM) is the third most undervalued construction stock based on its Valuation Rating of B. Valuation is one of 7 Component Grades used to calculate the overall Zen Rating.

Pultegroup has a valuation score of 29, which is -2 points higher than the construction industry average of 31. It passed 2 out of 7 valuation due diligence checks. Although this number is below the industry average, our proven quant model rates PHM a Valuation Rating of "B".

Pultegroup's stock has dropped -7.65% in the past year. It has overperformed other stocks in the construction industry by 12 percentage points.

40% of construction stocks rated by analysts are a hold right now. On average, analysts expect construction stocks to rise by 13.41% over the next year.

5.88% of construction stocks have a Zen Rating of A (Strong Buy), 0% of construction stocks are rated B (Buy), 70.59% are rated C (Hold), 23.53% are rated D (Sell), and 0% are rated F (Strong Sell).