Here is a fact that most people don't know about newly constructed homes: They tend to get painted twice. Typically the homebuilder will paint the new walls a basic white or off-white. Then once the homeowner moves in and begins to decorate, another coat of paint is then applied in custom colors. Thus, new-home building can be very beneficial to the paint manufacturers. One of Valspar's main competitors is Sherwin-Williams ( SHW), which would make a suitable addition to this housing rebound portfolio, but I decided to select the smaller Valspar (market cap $4.7 billion) over Sherwin-Williams (market cap $13.1 billion) solely on a valuation basis. Earnings for Valspar are expected to increase 23% in 2012 and 12% in 2013. The stock sells at a price/earnings multiple of 16, vs. 20 for Sherwin-Williams. -- Written by Scott Rothbort in Millburn, N.J.