2 Homebuilders to Help Japan Recover

BOSTON (TheStreet) -- The rebuilding of parts of Japan will take time and money. The country's two largest prefabricated homebuilders, Daiwa House Industry(DWAHY) and Sekisui House(SKHSY), are sure to be beneficiaries.

The companies' market values of $7.8 billion and $6.6 billion are bigger than that of the top U.S. homebuilder, Lennar(LEN.B).

Daiwa House Industry and Sekisui House are traded in the U.S. on the OTC Markets Group online market, formerly known as the "pink sheets." Both stocks rose to 2011 highs March 14, just three days after the earthquake and tsunami hit, on expectations they'll play big roles in the nation's rebuilding.

Daiwa House Industry is Japan's second-largest largest residential homebuilder, but its biggest prefabricated homebuilder, while Sekisui House is one of the largest homebuilders in the country and its prefabricated construction business is second-biggest.

The prospects for the two companies are compelling. The Japanese government has said it will cost as much as $309 billion to rebuild the nation, which is about 6% of Japan's total economic output in 2010.

It estimates that more than 135,000 buildings were destroyed or damaged by the March 11 earthquake and tsunami.

According to the World Bank, Japan will need up to five years to rebuild and recover from the damage caused by the natural disasters.

Japan's Miyagi prefecture has already started building 1,110 temporary homes as that region's government begins work to house more than 243,000 displaced residents. As part of that, it has requested 10,000 housing units from the Japan Prefabricated Construction Suppliers and Manufacturers Association. Daiwa and Sekisui are both members of the industry trade group.

Fukushima prefecture, where radiation leaks triggered evacuation of areas near two nuclear power plants, began building temporary homes March 23 and aims to build 14,000 units.

Here is a summary of each company's prospects: