DR HORTON INC (DHI) Stock Fundamental Analysis
NYSE:DHI - New York Stock Exchange, Inc. - US23331A1097 - Common Stock - Currency: USD
DHI gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 63 industry peers in the Household Durables industry. DHI gets an excellent profitability rating and is at the same time showing great financial health properties. DHI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
DHI had positive earnings in the past year.
In the past year DHI had a positive cash flow from operations.
Each year in the past 5 years DHI has been profitable.
DHI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of DHI (10.89%) is better than 85.71% of its industry peers.
DHI has a Return On Equity of 16.48%. This is in the better half of the industry: DHI outperforms 73.02% of its industry peers.
DHI's Return On Invested Capital of 12.73% is fine compared to the rest of the industry. DHI outperforms 77.78% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DHI is significantly above the industry average of 10.42%.
The 3 year average ROIC (18.65%) for DHI is well above the current ROIC(12.73%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.89% | ||
| ROE | 16.48% | ||
| ROIC | 12.73% |
ROA(3y)15.68%
ROA(5y)15.4%
ROE(3y)23.3%
ROE(5y)23.6%
ROIC(3y)18.65%
ROIC(5y)18.07%
1.3 Margins
Looking at the Profit Margin, with a value of 11.46%, DHI belongs to the top of the industry, outperforming 90.48% of the companies in the same industry.
DHI's Profit Margin has improved in the last couple of years.
DHI has a Operating Margin of 15.48%. This is amongst the best in the industry. DHI outperforms 88.89% of its industry peers.
DHI's Operating Margin has improved in the last couple of years.
DHI has a Gross Margin of 25.08%. This is comparable to the rest of the industry: DHI outperforms 46.03% of its industry peers.
DHI's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.48% | ||
| PM (TTM) | 11.46% | ||
| GM | 25.08% |
OM growth 3Y-3.96%
OM growth 5Y7.21%
PM growth 3Y-4.92%
PM growth 5Y7.03%
GM growth 3Y-2.88%
GM growth 5Y3.16%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), DHI is creating value.
The number of shares outstanding for DHI has been reduced compared to 1 year ago.
The number of shares outstanding for DHI has been reduced compared to 5 years ago.
The debt/assets ratio for DHI is higher compared to a year ago.
2.2 Solvency
DHI has an Altman-Z score of 5.78. This indicates that DHI is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of DHI (5.78) is better than 84.13% of its industry peers.
DHI has a debt to FCF ratio of 2.60. This is a good value and a sign of high solvency as DHI would need 2.60 years to pay back of all of its debts.
The Debt to FCF ratio of DHI (2.60) is better than 73.02% of its industry peers.
DHI has a Debt/Equity ratio of 0.30. This is a healthy value indicating a solid balance between debt and equity.
DHI has a Debt to Equity ratio of 0.30. This is comparable to the rest of the industry: DHI outperforms 52.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.3 | ||
| Debt/FCF | 2.6 | ||
| Altman-Z | 5.78 |
ROIC/WACC1.47
WACC8.64%
2.3 Liquidity
DHI has a Current Ratio of 4.91. This indicates that DHI is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 4.91, DHI is in the better half of the industry, outperforming 74.60% of the companies in the same industry.
A Quick Ratio of 0.50 indicates that DHI may have some problems paying its short term obligations.
The Quick ratio of DHI (0.50) is worse than 73.02% of its industry peers.
The current and quick ratio evaluation for DHI is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.91 | ||
| Quick Ratio | 0.5 |
3. Growth
3.1 Past
DHI shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -16.25%.
Measured over the past years, DHI shows a very strong growth in Earnings Per Share. The EPS has been growing by 27.63% on average per year.
Looking at the last year, DHI shows a decrease in Revenue. The Revenue has decreased by -7.31% in the last year.
DHI shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 15.91% yearly.
EPS 1Y (TTM)-16.25%
EPS 3Y7.75%
EPS 5Y27.63%
EPS Q2Q%-18.05%
Revenue 1Y (TTM)-7.31%
Revenue growth 3Y9.84%
Revenue growth 5Y15.91%
Sales Q2Q%-7.43%
3.2 Future
Based on estimates for the next years, DHI will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.11% on average per year.
Based on estimates for the next years, DHI will show a small growth in Revenue. The Revenue will grow by 4.49% on average per year.
EPS Next Y-19.31%
EPS Next 2Y-6.13%
EPS Next 3Y2.4%
EPS Next 5Y11.11%
Revenue Next Year-8.09%
Revenue Next 2Y-3.45%
Revenue Next 3Y0.18%
Revenue Next 5Y4.49%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 13.28 indicates a correct valuation of DHI.
DHI's Price/Earnings ratio is in line with the industry average.
DHI's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.87.
DHI is valuated correctly with a Price/Forward Earnings ratio of 13.09.
DHI's Price/Forward Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 35.34, DHI is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.28 | ||
| Fwd PE | 13.09 |
4.2 Price Multiples
DHI's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of DHI indicates a somewhat cheap valuation: DHI is cheaper than 69.84% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.73 | ||
| EV/EBITDA | 9.6 |
4.3 Compensation for Growth
DHI has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.48
EPS Next 2Y-6.13%
EPS Next 3Y2.4%
5. Dividend
5.1 Amount
With a yearly dividend of 0.98%, DHI is not a good candidate for dividend investing.
DHI's Dividend Yield is a higher than the industry average which is at 3.24.
With a Dividend Yield of 0.98, DHI pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.98% |
5.2 History
The dividend of DHI is nicely growing with an annual growth rate of 14.84%!
DHI has been paying a dividend for at least 10 years, so it has a reliable track record.
DHI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)14.84%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
DHI pays out 11.96% of its income as dividend. This is a sustainable payout ratio.
The dividend of DHI is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP11.96%
EPS Next 2Y-6.13%
EPS Next 3Y2.4%
165.62
+1.72 (+1.05%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners87.84%
Inst Owner Change-2%
Ins Owners0.59%
Ins Owner Change1.44%
Market Cap49.37B
Analysts68
Price Target162.11 (-2.12%)
Short Float %3.25%
Short Ratio2.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.98% |
Yearly Dividend1.2
Dividend Growth(5Y)14.84%
DP11.96%
Div Incr Years10
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)6.26%
Min EPS beat(2)-2.98%
Max EPS beat(2)15.5%
EPS beat(4)2
Avg EPS beat(4)3.83%
Min EPS beat(4)-6.87%
Max EPS beat(4)15.5%
EPS beat(8)5
Avg EPS beat(8)5.8%
EPS beat(12)8
Avg EPS beat(12)11.36%
EPS beat(16)12
Avg EPS beat(16)11.14%
Revenue beat(2)1
Avg Revenue beat(2)-0.2%
Min Revenue beat(2)-4.66%
Max Revenue beat(2)4.26%
Revenue beat(4)2
Avg Revenue beat(4)0.74%
Min Revenue beat(4)-4.66%
Max Revenue beat(4)6.43%
Revenue beat(8)6
Avg Revenue beat(8)2.25%
Revenue beat(12)9
Avg Revenue beat(12)5.2%
Revenue beat(16)12
Avg Revenue beat(16)4.27%
PT rev (1m)4.51%
PT rev (3m)4.38%
EPS NQ rev (1m)-3.65%
EPS NQ rev (3m)-17.84%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.02%
Revenue NQ rev (1m)-4.04%
Revenue NQ rev (3m)-12.32%
Revenue NY rev (1m)0.44%
Revenue NY rev (3m)0.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.28 | ||
| Fwd PE | 13.09 | ||
| P/S | 1.43 | ||
| P/FCF | 17.73 | ||
| P/OCF | 16.96 | ||
| P/B | 2.05 | ||
| P/tB | 2.07 | ||
| EV/EBITDA | 9.6 |
EPS(TTM)12.47
EY7.53%
EPS(NY)12.65
Fwd EY7.64%
FCF(TTM)9.34
FCFY5.64%
OCF(TTM)9.76
OCFY5.9%
SpS115.98
BVpS80.68
TBVpS80.13
PEG (NY)N/A
PEG (5Y)0.48
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.89% | ||
| ROE | 16.48% | ||
| ROCE | 17.64% | ||
| ROIC | 12.73% | ||
| ROICexc | 13.86% | ||
| ROICexgc | 15.45% | ||
| OM | 15.48% | ||
| PM (TTM) | 11.46% | ||
| GM | 25.08% | ||
| FCFM | 8.06% |
ROA(3y)15.68%
ROA(5y)15.4%
ROE(3y)23.3%
ROE(5y)23.6%
ROIC(3y)18.65%
ROIC(5y)18.07%
ROICexc(3y)21.3%
ROICexc(5y)21.07%
ROICexgc(3y)23.91%
ROICexgc(5y)23.3%
ROCE(3y)25.99%
ROCE(5y)25.32%
ROICexcg growth 3Y-8.14%
ROICexcg growth 5Y5.96%
ROICexc growth 3Y-9.18%
ROICexc growth 5Y5.08%
OM growth 3Y-3.96%
OM growth 5Y7.21%
PM growth 3Y-4.92%
PM growth 5Y7.03%
GM growth 3Y-2.88%
GM growth 5Y3.16%
F-Score3
Asset Turnover0.95
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.3 | ||
| Debt/FCF | 2.6 | ||
| Debt/EBITDA | 1.33 | ||
| Cap/Depr | 128.82% | ||
| Cap/Sales | 0.36% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 53.42% | ||
| Profit Quality | 70.27% | ||
| Current Ratio | 4.91 | ||
| Quick Ratio | 0.5 | ||
| Altman-Z | 5.78 |
F-Score3
WACC8.64%
ROIC/WACC1.47
Cap/Depr(3y)178.02%
Cap/Depr(5y)250.53%
Cap/Sales(3y)0.44%
Cap/Sales(5y)0.74%
Profit Quality(3y)45.73%
Profit Quality(5y)38.28%
High Growth Momentum
Growth
EPS 1Y (TTM)-16.25%
EPS 3Y7.75%
EPS 5Y27.63%
EPS Q2Q%-18.05%
EPS Next Y-19.31%
EPS Next 2Y-6.13%
EPS Next 3Y2.4%
EPS Next 5Y11.11%
Revenue 1Y (TTM)-7.31%
Revenue growth 3Y9.84%
Revenue growth 5Y15.91%
Sales Q2Q%-7.43%
Revenue Next Year-8.09%
Revenue Next 2Y-3.45%
Revenue Next 3Y0.18%
Revenue Next 5Y4.49%
EBIT growth 1Y-20.21%
EBIT growth 3Y5.48%
EBIT growth 5Y24.26%
EBIT Next Year-22.35%
EBIT Next 3Y-5.38%
EBIT Next 5Y3.58%
FCF growth 1Y-13.97%
FCF growth 3Y96.46%
FCF growth 5Y24.83%
OCF growth 1Y-14.03%
OCF growth 3Y60.02%
OCF growth 5Y19.67%