Housing

RBC Says 4 Top Homebuilders Could Also Be Takeover Targets Now

KB Home

This very well-known company could be acquired. KB Home (NYSE: KBH) is one of the largest U.S. homebuilders, with roughly 2% market share. The company builds single-family homes, townhomes and condos for first-time, move-up and active adult buyers. It is positioned in roughly 40 markets, with around 70% to 75% of revenues attributable to the West and Central regions. It also provides mortgage services through a joint venture with Nationstar.

Founded in 1957, and the first homebuilder listed on the New York Stock Exchange, the company has built nearly 600,000 homes for families from coast to coast. Distinguished by its personalized homebuilding approach, KB Home lets each buyer choose their lot location, floor plan, décor choices, design features and other special touches that matter most to them.

Shareholders are paid just a 0.5% dividend. The stock closed trading on Thursday at $28.84, in a 52-week trading range of $18.83 to $38.80. The consensus price target is $32.38.

Taylor Morrison

This homebuilder also operates in some of the most desirable areas of the United States. Taylor Morrison Home Corp. (NYSE: TMHC) designs, builds and sells single-family detached and attached homes. It is also a land developer, with a portfolio of lifestyle and master-planned communities.

Taylor Morrison segments:

  • East: Atlanta, Charlotte, North Florida, Raleigh, Southwest Florida and Tampa
  • Central: Austin, Dallas and Houston (the Dallas and Houston markets each include both a Taylor Morrison division and a Darling Homes division)
  • West: Bay Area, Chicago, Denver, Phoenix, Sacramento and Southern California.

The consensus price objective was last seen at $30.17, while the shares ended trading on Thursday at $23.65. Their 52-week trading range is $19.68 to $28.42.

While there is absolutely no guarantee that these companies are acquired, they all are outstanding stocks to own in aggressive growth portfolios on their own. The buyout factor is just another reason to consider them.

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