Home Automation & Security in Demand: 5 Stocks to Watch – August 17, 2021


In earlier times, home automation and security were more about security sensors placed around the lawn, flashing lights automatically or directly placing an emergency call to 911 in case of a break-in. However, thanks to development in home technology, one can now be alerted of such situations on their smartphones. Internet of Things (IoT) has been around for over a decade and its application in home automation and security is impeccable.

Smart security and home automation tools include controllers, user interface devices, sensors, actuators, output devices (like dimmers, automated window coverings and dampers), and wiring and networking devices). A major part of home automation and security relies on the interconnection of these devices and appliances. It gives an extra layer of security, convenience and sustainability to the living space. With technology constantly evolving, these techs are becoming popular and more affordable.

Research firm Statista predicts that the smart home market will rake in $28.8 billion in revenues in 2021. In fact, the market is expected to see a CAGR of 12.8% to reach $46.7 billion by 2025. Home technology usage in households may jump to 40.1% by the end of this year, growing to 57.3% by 2025, with the United States leading the global market rally.

Home automation and security witnessed a significant jump last year, especially with people opting to make homes more energy-efficient. In fact, in order to cut down interaction with outsiders, many adopted robotic vacuum cleaners, smart cooking assistants, butlers, and even healthcare bots. For instance, SpotMini, a spinoff of Boston Dynamics’ original robotic dog, Spot, has found greater use in homes. It can already help in opening doors and providing security when the house is empty.

Per a National Association of Home Builder’s (NAHB) study in March 2021, buyers are ready to pay more for home technology that makes them feel safer and more comfortable in their homes. From programmable thermostats to security cameras, video doorbells, wireless home security systems, and multi-zone HVAC (heating, ventilation, and air conditioning) systems, consumers are using technology that can control the micro-climate at home.

Additionally, these home technologies have found significant application in the healthcare space. From sleep monitoring devices to smart watches, healthcare home technologies can monitor all aspects of health and notify abnormality, before the person feels it. Even in the case of elderly people who live alone, these smart home technologies can monitor their health and report to doctors and family, regardless of the distance.

5 Top Choices

Wellness, usability, entertainment, and security will continue to power the home automation and security market, and declining costs will constantly boost the space. We have, thus, shortlisted five home technology stocks that are poised to grow.

Resideo Technologies, Inc. (REZI Free Report) develops, manufactures, and sells comfort, residential thermal, and security solutions to the commercial and residential end markets. The company reported a 25.81% earnings surprise in the last quarter.

The company that belongs to the Zacks Security and Safety Services industry has a projected earnings growth of 4.9% for the current year. The Zacks Consensus Estimate for the company’s current-quarter earnings has been revised 20.4% upward over the past 90 days.  Resideo sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Vivint Smart Home, Inc. (VVNT Free Report) engages in the sale, installation, servicing, and monitoring of smart home and security systems. The company’s revenues grew 17% in the last quarter, with a 13.6% earnings surprise. It has an expected earnings growth rate for the current quarter is 43.8% compared with the Zacks Retail – Consumer Electronics industry’s projected earnings growth of 25.8%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 29.1% upward over the past 60 days. Vivint Smart Home carries a Zacks Rank #3 (Hold).

Honeywell International Inc. (HON Free Report) offers automated home solutions and has merged with Intel to develop advanced security platform for home solutions since April 2019. This Zacks Rank #3 company that belongs the Zacks Diversified Operations industry has a projected earnings growth of 14.1% for the current year. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 0.1% upward over the past 60 days. 

Johnson Controls International plc (JCI Free Report) designs, sells, installs, and services heating, ventilating, air conditioning, controls, refrigeration, integrated electronic security, energy efficiency solutions and more. Its HVAC & Controls and Fire & Security segment witnessed a 9.5% jump in revenues in the United States.

This Zacks Rank #3 company’s expected earnings growth rate for the current year is 18.8% compared with the Zacks Security and Safety Services industry’s projected earnings growth of 13.8%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 1.1% upward over the past 60 days.

Alarm.com Holdings, Inc. (ALRM Free Report)  provides interactive security solutions to control and monitor security systems. It reported an earnings surprise of 42.11% in the last quarter. This Zacks Rank #3 company, belonging to the Zacks Security and Safety Services industry, has an expected earnings growth rate of 1.7% for the current year. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 6.6% upward over the past 60 days.





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