Applying Peter Lynch’s stock selection rules to DR HORTON INC (NYSE:DHI)

Peter Lynch, one of the most successful investors of all time, focused on growth stocks with strong fundamentals and a business model that’s easy to understand. Let’s analyze whether DR HORTON INC (NYSE:DHI) fits his legendary investment approach.

Checking the Peter Lynch growth stock criteria for DR HORTON INC (NYSE:DHI)

• DHI has a healthy Return on Equity(ROE) of 17.64%. This demonstrates the company's efficient utilization of capital and indicates its commitment to driving profitability.
• With a current Debt-to-Equity ratio at 0.27, DHI showcases its disciplined capital structure. The company's prudent management of debt obligations contributes to its financial stability and long-term sustainability.
• DHI has achieved 27.63 growth in EPS over the past 5 years, reflecting a sustained improvement in earnings performance.
• Considering its PEG ratio of 0.35, DHI may be an undervalued growth opportunity.
• With a Current Ratio of 6.71, DHI appears well-positioned to meet its near-term financial obligations.

Zooming in on the fundamentals.

ChartMill employs a sophisticated system to assign a Fundamental Rating to every stock in its analysis. This rating, which ranges from 0 to 10, is determined by carefully assessing multiple fundamental indicators and properties.

Taking everything into account, DHI scores 7 out of 10 in our fundamental rating. DHI was compared to 64 industry peers in the Household Durables industry. DHI has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. DHI is not valued too expensively and it also shows a decent growth rate.

For an up to date full fundamental analysis you can check the fundamental report of DHI

Every day, new Affordable Growth stocks can be found on ChartMill in our Peter Lynch screener.

Keep in mind

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.