D R Horton is a ‘buy’ despite the U.S. housing recession

U.S. housing market has seen a lot of pain this year as mortgage rates went up rapidly. But that has also created some exciting opportunities for the equity investors, says Art Hogan – the Chief Market Strategist at B. Riley.

The bull case for D R Horton

A name that particularly pops out to him is D R Horton Inc (NYSE: DHI); the largest U.S. homebuilder that’s down 35% for the year at the time of writing. Explaining why on CNBC’s “Power Lunch”, Hogan said:

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The space is being washed out. But if you look at the potential for any new supply in the housing market coming from news homes, D R Horton really jumps out at you for a lot of reasons like the broad distribution, their geographic distribution.

D R Horton is scheduled to report its Q4 results on November 9th. Consensus is for it to earn $5.16 a share this quarter, significantly above $3.70 it earned last year.

What the technicals are suggesting

According to Redfin (residential real estate brokerage), home sales and listings were down 25% and 22% in the United States last month. Still, Hogan noted:

Their entry level cost in a single-family home is the lowest of all homebuilders. It’s based at $68 on the chart – has been there for about three months. A breakout could take it to $76. If you’ll take a shot at homebuilders, D R Horton is the way to go.

The Arlington-headquartered company also pays a dividend yield of 1.34%. Two other names that Hogan is bullish on, include Pfizer and WestRock.

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Source: https://invezz.com/news/2022/10/20/buy-d-r-horton-stock-us-housing-recession/