4 Top Furniture Industry Stocks To Buy Amid Solid Housing & R&R Trend

One-Year Price Performance

Industry’s Current Valuation

On the basis of forward 12-month price-to-earnings (P/E), which is commonly used for valuing furniture stocks, the industry is currently trading at 17.8X compared with the S&P 500’s 23X and the sector’s 33.8X.

Over the past five years, the industry has traded as high as 17.8X and as low as 9.4X, with the median being 15.3X, as the chart below shows.

Industry’s P/E Ratio (Forward 12-Month) Versus S&P 500

4 Furniture Stocks to Buy Right Now

We have selected four stocks from the Zacks universe of furniture stocks that currently sport a Zacks Rank #1 (Strong Buy) or 2 (Buy).

Bassett Furniture Industries, Incorporated: Based in Bassett, VA, this company manufactures, markets, and retails home furnishings in the United States and internationally. Although COVID-19-related turmoil continued to plague the company’s daily operations during the period, the company’s Wholesale business has been gaining from Bassett Design Centers and Club Level motion program, expanding its market share with the independent furniture store community, especially with Club Level assortment. It Corporate Retail unit has been benefiting from digital outreach strategies. Also, its focus on the “Made in America” strategy bodes well. It has been architecting product designs that will leverage the domestic supply chain and manufacturing prowess.

The stock has gained 29.3% in the past year, outperforming the industry’s 4.1% rise. The company currently sports a Zacks Rank #1 and has an expected earnings growth of 413.6% for fiscal 2021. The Zacks Consensus Estimate for its fiscal 2021 earnings has moved up 43.8% over the past 30 days.

Price and Consensus: BSET

American Woodmark Corporation: Headquartered in Winchester, VA, this Zacks Rank #2 company manufactures and distributes kitchen, bath, and home organization products. Strong momentum in R&R activity is expected to drive American Woodmark’s growth. Its home center and independent dealer and distribution businesses have been delivering solid growth.

Although the stock has declined 6.3% over the past year, the Zacks Consensus Estimate for its fiscal 2021 earnings has moved up 1.1% over the past 30 days, depicting analysts’ optimism over the company’s prospect. The company has an expected earnings growth of 7.4% for fiscal 2021.

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