Smart homes stocks took a beating last year in the stock market. The Smart Home Stock Index witnessed a 32% drop in price, mirroring the broader market.

Hence, it’s the right time to think about investing in the top smart home stocks.

Most smart home business companies aren’t pure plays, meaning that the volatility in their stock price isn’t directly linked to the performance of their smart home interests.

Nevertheless, the massive growth runway for the smart home space cannot be denied, with it expected to grow at a spectacular 27% from 2022 to 2030. Having said that, let’s look at three top smart home stocks that you should probably add to your portfolios.

Vivint Smart Home (VVNT)

Vivint Smart Home (NYSE:VVNT) is arguably the biggest public company and the top pure-play in the smart home sphere.

It boasts a customer base of roughly 2 million across the U.S. and Canada, experiencing double-digit expansion in its customer base in recent quarters.

Vivint Smart Home’s had a strong showing last year. Its stock rose by a whopping 21%, after the utility giant NRG Energy announced its intent to acquire it.

Vivint Home Security Systems has been a driving force in the industry for some time and is a great way for investors to gain exposure.

Vivint has effectively leveraged its customer base by offering other products, such as smart energy and insurance options which led to a significant expansion in its total addressable market.

Amazon (AMZN)

Tech giant  Amazon (NASDAQ:AMZN) is a dominant player in the smart home market, offering a variety of products and services to its customers.

Since the introduction of its Echo smart speaker in 2014, it has become one of the fastest-growing players in the market.

Amazon continues to add new startups to strengthen its positioning in the smart home market. It made waves last year after it acquired smart Roomba vacuum maker iRobot for a whopping $1.7 billion.

In the past, it had acquired video doorbell maker Ring and security camera maker Blink to add to its growing repertoire of smart home devices. Its Echo device alone attracted 32 million in sales in 2018, estimated to rise to 130 million by 2025.

Honeywell (HON)

Honeywell (NASDAQ:HON) is a diversified manufacturing and tech business with operations in multiple global sectors.

It has tentacles in various industries, including materials manufacturing, aviation, and production safety goods manufacturing. Also, the firm offers an array of smart home products through its home and building technologies division.

Its building technologies division has been growing at a brisk pace each year. The segment posted an 8.3% revenue growth in 2022 and roughly 7% in the previous year.

The segment continues to post healthy profits, contributing the Honeywell’s massive revenue base. With other businesses to fall back on, the company can continue investing in its smart home business and grow its market share in the niche.

The firm also offers a strong dividend yield of 2%, with plenty of room for payout expansion.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines