Stock prices of publicly traded window and door companies outpaced the broader market in April, as the W&D Stock Index increased 6.4 percent compared to a 5.7 percent increase for the S&P 500. These gains boosted the 12-month return on the W&D Index to 60.9 percent compared to a 47.7 percent increase for the S&P 500. Building products stocks have outperformed as demand for single-family construction continued to be high and mortgage rates continued to be low, resulting in positive construction data.
The Bureau of the Census reported that housing starts jumped 19.4 percent over the previous month and 37 percent over the previous year to a seasonally adjusted annual rate of 1.739 million units, which represents nearly a 15-year high. Importantly, the growth in starts and has been driven by a significant rebound in single-family construction activity across the country, which has trended positive for months as single-family starts were up 40.7 percent compared to the previous year. While the industry is currently working through significant supply constraints, overall demand in the construction market during COVID-19 has continued to accelerate, which will support public valuations and M&A opportunities in building products for the foreseeable future.
Source: Lincoln Financial
Stock chart April2021
Source: Lincoln Financial
