Lennar Class A

LEN

Market cap $31.2B

Legendary investor Warren Buffett has a history of beating the performance of the S&P 500 with his Berkshire Hathaway Inc (NYSE:BRK)(NYSE:BRK) conglomerate each year. A recent bet on homebuilders could help boost the 2025 performance of Berkshire Hathaway stock.

Wall Street analysts recently issued a wave of downgrades on several homebuilding stocks, raising fresh concerns about the outlook for the real estate sector. But does their bearish stance hold up under closer inspection?

Lennar Corporation LEN is stuck amid the housing market weakness as homebuyers are oscillating between high mortgage rate challenges and new home ownership. Moreover, to ease the pain of homebuyers, its initiative of lowering the ASP of home deliveries is pulling its top line downward.

U.S. equity markets tumbled in a sudden jolt of volatility as investors - already flying blind on key data - reacted to a surprise, massive tariff announcement on Chinese imports. The White House announced a 100% added tariff on all Chinese imports beginning next month - up from 30% currently - as retaliation to new export controls on rare minerals. The CBOE Volatility Index surged to the highest levels since mid-May in a sudden onset of angst following several months of relatively tranquil market conditions.

US homebuilder stocks remain in focus after an Evercore ISI analyst, Stephen Kim, downgraded six of them, citing near-term headwinds despite the sector posting robust profitability and capital returns. According to him, the policy shifts could hurt valuations.

Lennar Corporation LEN has trended downward 11.3% since announcing its third-quarter fiscal 2025 earnings. It has outperformed the Zacks Building Products - Home Builders industry, but is hovering below the broader Zacks Construction sector and the S&P 500 index.

Berkshire Hathaway CEO Warren Buffett is rightly regarded as the greatest investor of all time. Over a career spanning more than 60 years, Berkshire has crushed the S&P 500.

The 'Fast Money' traders talk pain in the homebuilders space and if a comeback is possible.

Mortgage rates often echo changes in the 10-year Treasury yield, which is rising. Financing costs could increase for buyers.

This article is part of our monthly series where we highlight five large-cap, relatively safe, dividend-paying companies offering significant discounts to their historical norms. We go over our filtering process to select just five conservative DGI stocks from more than 7,500 companies that are traded on U.S. exchanges, including OTC networks. In addition to the primary list that yields 3.56%, we present two other groups of five DGI stocks each, from moderate to high yields of up to 8%.