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Assessing KB Home's earnings for the first quarter this year

Part 2
Assessing KB Home's earnings for the first quarter this year (Part 2 of 6)

KB Home’s sustainability initiative gives it an important niche

KB Home is a leader in energy-efficient homes

KB Home (KBH) is a believer in sustainability and has taken the lead in developing energy-efficient homes. It has been able to build a four-bedroom, 2,500 square foot home that has an average energy bill of less than $100 a month. It has been expanding its ZeroHouse 2.0 program, which strives to build a home that will have projected energy costs of zero.

KB Home - GreenEnlarge Graph

Sustainability guiding principles

KB Home releases a sustainability report every year. Its guiding principles are:

  • “Offer environmentally friendly and affordably priced homes, products, and features that minimize our homeowners’ carbon footprint and energy usage, conserve natural resources and create more sustainable homes and communities.”
  • “Utilize our history of innovation and our process-driven approach to reduce waste and natural resource usage throughout our organization.”
  • “Be an active and responsible member of the communities in which we operate.”
  • “Be an environmental educator for all our employees, homebuyers and business partners regarding home energy conservation and environmental sustainability.”
  • “Maintain our standards of transparency and corporate citizenship by publicly reporting on the progress in and challenges to our sustainability efforts.”

Specific measures to make homes more sustainable:

  • Installation of Energy Star appliances in all homes and adhering to the new Energy Star Version 3 standards
  • Continue to provide solar panel installation as standard or optional feature in selected markets (also, it continues to explore future ways to facilitate offering solar power systems in more homes)
  • Provide an energy monitoring system in every home as a standard feature to increase homeowners’ awareness of their consumption. This can result in additional energy savings of up to 10%
  • Improve indoor air quality with low-VOC paints
  • Continue to promote its WaterSense-labeled new homes, which consume less water
  • Expand low water usage landscaping standards.

KB advertises (as the above graph shows) the projected energy savings a homeowner could be expected to achieve under its green initiatives. This initiative gives it an advantage over other homebuilders like D.R. Horton (DHI), Lennar (LEN), PulteGroup (PHM) and Toll Brothers (TOL).

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