Meritage Homes Corporation (MTH): Among the Best Consumer Discretionary Stocks to Buy According to Analysts

Meritage Homes Corporation (MTH) has been identified as one of the top consumer discretionary stocks to buy by analysts, given its strong execution, resilient demand, and favorable macro backdrop. The company's strategic focus on affordable, move-in ready homes positions it well to capitalize on market trends and consumer preferences. MTH's energy-efficient homebuilding practices also contribute to its competitive advantage and long-term growth prospects.



MTH's strong order growth and record backlog conversion demonstrate robust demand for its homes, despite a tough macro backdrop and high mortgage rates. The company's conservative FY25 guidance sets the stage for potential upside surprises, as it may exceed expectations despite the challenging macro environment. MTH's dividend growth, which increased by 455.56% in 2024, also highlights the company's financial strength and commitment to returning value to shareholders.



MTH's strategic focus on affordable, move-in ready homes allows it to fill a void in the housing market and attract buyers who value the convenience and immediate availability of these homes. The company's backlog conversion rate of 177% in the fourth quarter of 2024 demonstrates its ability to secure orders and deliver homes efficiently. MTH's energy-efficient homebuilding practices, such as the use of spray foam insulation, further enhance its competitive advantage by reducing operating costs and attracting environmentally conscious buyers.



MTH's favorable demographics for its product offerings, undersupply of homes at its price points, and stability in the job market contribute to its strong demand and growth prospects. The company's capital allocation strategy, which focuses on investing in growth and returning cash to shareholders, further supports its long-term growth trajectory. MTH's two-for-one stock split in January 2025 reflects its confidence in the company's long-term growth prospects.



In conclusion, Meritage Homes Corporation (MTH) is an attractive investment opportunity in the consumer discretionary sector, given its strong execution, resilient demand, and favorable macro backdrop. The company's strategic focus on affordable, move-in ready homes and energy-efficient homebuilding practices contribute to its competitive advantage and long-term growth prospects. MTH's dividend growth, conservative guidance, and capital allocation strategy further support its strong financial performance and growth potential. As a result, analysts have identified MTH as one of the best consumer discretionary stocks to buy, making it an attractive investment opportunity for investors seeking exposure to the housing market.