U.S.homebuilder, KB Home (KBH), recently acquired land in Jefferson County in the Denver area to cash in on the increasing market activity in the region.
KB Home has acquired 68 lots at the foothills of Jefferson County to develop a community to be named Lyons Ridge. Land development is expected to begin this summer with model homes scheduled to be opened in fall. The picturesque beauty and premium location of the homes in this community beside the Red Rocks Country Club and nearby mountain resorts are expected to be great draws for prospective home owners.
Lyons Ridge will be KB Home’s third community in Jefferson County, the other two communities being Bear Creek Meadows in Morrison and Belmar in Lakewood. The new community will bring the total number of KB Home’s communities in and around Denver to 12.
Through its operational business model KBnxt, homes in the Lyons Ridge community, like all KB Homes, will be energy efficient and can be customized to suit each homebuyer’s needs. Under its ‘Built to Order’ approach, KB Home begins construction only after a purchase agreement is executed, and then offers consumers the flexibility to design their new homes. Apart from the obvious benefit of offering choice to consumers, the model also helps the company turn over its inventory more quickly than its peers, thereby supplying capital for reinvestment. Over the long run, this reduces the risk of unsold inventory, leading to higher returns on invested capital.
Based upon the single business model, KB Home focuses on providing homes with energy-efficient features without materially increasing the price. Thus, the company lowers the total cost of home ownership and that gives KB Home a competitive advantage.
Other Stocks to Consider
KB Home carries a Zacks Rank # 2 (Buy). Other stocks in the homebuilding sector that are performing well and deserve a mention include D. R. Horton Inc. (DHI), Ryland Group Inc. (RYL) and Meritage Homes Corporation (MTH), all carrying a Zacks Rank #1 (Strong Buy).
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