Better Buy: Home Depot vs. Wayfair
Between 2011 and 2021, annual sales of homes in the U.S. rose from 4.6 million to 6.9 million, representing a compound annual growth rate (CAGR) of 4.1%. That steady growth, which was supported by a stable economy and historically low interest rates, drove investors toward home-oriented stocks like Home Depot (NYSE: HD) and Wayfair (NYSE: W) -- which both reached their record highs during the feverish buying frenzy in growth stocks in 2021.
Unfortunately, sales of new homes declined throughout most of 2022 as rising interest rates made mortgages less appealing. Inflation also prompted buyers to postpone their purchases. As a result, shares of Home Depot and Wayfair now trade about 20% and 90% below their all-time highs, respectively. Should investors buy either stock as a turnaround play?
Image source: Getty Images.
Source Fool.com
