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Pulte Group – One Of The Best Real Estate Stocks Right Now

New home sales recently hit a 13-year high in June 2020. 776,000 purchases of new homes were made during the month, a growth of 13.8%. The month of July saw existing home sales go up to 5.86 million units. The median price also broke the $300,000 mark for the very first time. New single-family home sales rose 13.9% from the previous month and 36.3% year-over-year. Clearly, home buying is gaining strength across the board and home builder stocks are poised to benefit. Companies like PulteGroup have been hitting their 52-week highs.

PulteGroup – one of the top home builder stocks 2020

PulteGroup is the third-largest home construction company in the US. It operates in 44 markets across 23 states in the country. The company has had a good track record of sustaining high ROEs, high margins, and a low debt-to-equity ratio. It controls over 150,000 lots and is posed to grow long term once the economy recovers from the pandemic.

The recent performance of PulteGroup

PulteGroup reported its Q22020 earnings on July 23rd, 2020. Revenues were up 4.4% on a Y-o-Y basis from $2.48 billion to $2.59 billion. Net income was up a robust 44% from $241 million in Q22019 to $348 million in Q22020. The positive results clearly translated into a strong stock performance as well. PulteGroup is up 150% since March 23rd and up 17.19% for the year 2020. Compare that with the S&P500 which is up 49% since March 23rd and up 3.07% for the year 2020. Clearly, PulteGroup is among the best real estate stocks to buy.

So what’s driving the demand for home sales?

PulteGroup CEO Ryan Marshall listed 4 factors that seem to be driving the demand for home sales. Firstly, interest rates are at historic lows. Secondly, the company has seen multi-year highs in terms of internet searches for buying new homes. There has been a lot of consumer interest in new homes. Thirdly, urban buyers seem to account for more of the demand than rural buyers. And fourthly, the housing supply is limited as the total housing inventory is down 19% on a Y-o-Y basis.


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