News Image

DR Horton Inc (NYSE:DHI) – A Homebuilder Aligned With Peter Lynch’s GARP Strategy

By Mill Chart

Last update: May 24, 2025

DR Horton Inc (NYSE:DHI) stands out as a potential candidate for long-term investors following Peter Lynch’s growth-at-a-reasonable-price (GARP) approach. The company, one of the largest homebuilders in the U.S., meets several key criteria from Lynch’s investment philosophy, including sustainable earnings growth, reasonable valuation, and strong financial health.

DR Horton stock chart

Why DHI Fits the Peter Lynch Strategy

  • Strong Historical Growth: DHI has delivered an impressive 5-year average EPS growth of 27.63%, well above Lynch’s minimum threshold of 15%. While recent earnings have softened, the long-term trend remains solid.
  • Reasonable Valuation: The stock trades at a P/E ratio of 8.98, below both the industry average and the S&P 500. Its PEG ratio (factoring in past growth) is low, suggesting the market may not fully price in its historical performance.
  • Healthy Balance Sheet: With a debt-to-equity ratio of 0.27, DHI maintains a conservative capital structure, aligning with Lynch’s preference for financially stable companies.
  • High Profitability: The company’s return on equity (ROE) of 17.64% exceeds Lynch’s 15% benchmark, reflecting efficient use of shareholder capital.
  • Liquidity Strength: A current ratio of 6.71 indicates ample short-term financial flexibility, reducing liquidity risks.

Fundamental Strengths

DHI’s financial health is robust, with high marks for profitability and solvency. The company generates strong operating margins (16.26%) and has consistently grown revenue at an annualized rate of 15.91% over the past five years. While near-term headwinds have impacted earnings, analysts expect EPS to rebound with 10.77% annual growth in the coming years.

For a deeper dive into DHI’s fundamentals, review the full analysis here.

Our Peter Lynch Strategy screener highlights more stocks that fit this disciplined investment approach.

Disclaimer

This is not investing advice. The observations here are based on available data at the time of writing. Always conduct your own research before making investment decisions.

DR HORTON INC

NYSE:DHI (7/14/2025, 6:30:00 PM)

After market: 135.75 -0.35 (-0.26%)

136.1

-0.72 (-0.53%)



Find more stocks in the Stock Screener

DHI Latest News and Analysis

ChartMill News Image5 days ago - ChartmillWednesday's session: top gainers and losers in the S&P500 index

Wondering what's happening in today's session for the S&P500 index? Stay informed with the top movers within the S&P500 index on Wednesday.

Mentions: MNST MO HSY BAX ...

ChartMill News Image5 days ago - ChartmillExplore the top gainers and losers within the S&P500 index in today's session.

Let's delve into the developments on the US markets in the middle of the day on Wednesday. Below, you'll find the top gainers and losers within the S&P500 index during today's session.

Mentions: MNST MO HSY MRK ...

ChartMill News Image7 days ago - ChartmillDR HORTON INC (NYSE:DHI) – A Strong Contender for GARP Investors

DR HORTON INC (NYSE:DHI) offers growth at a reasonable price, with strong historical earnings, solid financials, and an attractive valuation—making it a candidate for long-term investors.

ChartMill News Image11 days ago - ChartmillUncover the latest developments among S&P500 stocks in today's session.

Get insights into the S&P500 index performance on Thursday. Explore the top gainers and losers within the S&P500 index in today's session.

Mentions: BG CPB MKC PCAR ...

ChartMill News Image11 days ago - ChartmillTop S&P500 movers in Thursday's session

Join us in exploring the top gainers and losers within the S&P500 index in the middle of the day on Thursday as we examine the latest happenings in today's session.

Mentions: MOS BG CPB PCAR ...

ChartMill News Image11 days ago - ChartmillWhat's going on in today's session: S&P500 gap up and gap down stocks

Thursday's session is showcasing interesting market movements in the S&P500 index, with notable gap up and gap down stocks. Stay updated with the gapping S&P500 stocks in today's session.

Mentions: BG CPB MKC MKTX ...

Follow ChartMill for more