Stock prices of publicly traded window and door companies outpaced the broader market in January, as the W&D Stock Index increased 3.1 percent compared to a 0.4 percent increase for the S&P 500. These gains boosted the 12-month return on the W&D Index to 21.7 percent compared to a 14.3 percent increase for the S&P 500.
Building products stocks have outperformed the market as mortgage rates continue to be low and construction data has been positive. The Census Bureau reported that housing starts jumped 5.8 percent to a seasonally adjusted annual rate of 1.669 million units. Importantly, the growth in starts and has been driven by a significant rebound in single-family construction activity across the country and has trended positive for months as single-family starts were up 27.8 percent for the full year 2020. Overall, growth in the construction market during COVID-19 has accelerated, which will support valuation and M&A opportunities in building products in the months to come.
Source: Lincoln Financial