3 Ways to Play the Rental Housing Boom

Gain exposure to the rental market without being a landlord

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3 Ways to Play the Rental Housing Boom

Stock: Lennar (LEN)

len 150x150  3 Ways to Play the Rental Housing BoomAnalysts are expecting strong earnings for Lennar (LEN), one of the largest homebuilders in the U.S., when it reports on June 25 — and with good reason.

A rebounding construction market drove rival Toll Brothers (TOL), which reported earnings last Wednesday, to double its quarterly profit. The same trends should positively impact LEN stock, but with a bonus: Last year, LEN revealed it was allocating $1 billion to building apartments in high-growth — and high rent — areas.  Many of the new communities offer luxury amenities such as stainless steel appliances, granite countertops and resort-style pools and fitness centers – directly catering to the new generation of renters.

LEN stock is only up about 3% in 2014, but it’s clearly a growth play. With a price-to-earnings-growth (PEG) ratio of just 0.6 and a forward P/E of a little more than 12, LEN stock looks undervalued now. LEN pays a nominal dividend with a 0.4% current yield, but the company knows its market and is positioning its new properties well, so LEN promises to be a solid buy-and-hold stock.


Article printed from InvestorPlace Media, http://investorplace.com/2014/06/rental-housing-stocks-len/.

©2014 InvestorPlace Media, LLC

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