DR HORTON INC (DHI) Stock Fundamental Analysis
NYSE:DHI - New York Stock Exchange, Inc. - US23331A1097 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to DHI. DHI was compared to 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 is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year DHI was profitable.
In the past year DHI had a positive cash flow from operations.
In the past 5 years DHI has always been profitable.
DHI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
DHI has a better Return On Assets (12.03%) than 87.30% of its industry peers.
DHI has a better Return On Equity (17.64%) than 77.78% of its industry peers.
With a decent Return On Invested Capital value of 14.00%, DHI is doing good in the industry, outperforming 79.37% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for DHI is significantly above the industry average of 10.21%.
The 3 year average ROIC (18.65%) for DHI is well above the current ROIC(14.00%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.03% | ||
| ROE | 17.64% | ||
| ROIC | 14% |
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 12.15%, 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 16.33%. 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 25.72%. This is comparable to the rest of the industry: DHI outperforms 47.62% of its industry peers.
In the last couple of years the Gross Margin of DHI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.33% | ||
| PM (TTM) | 12.15% | ||
| GM | 25.72% |
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so 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 5.83. This indicates that DHI is financially healthy and has little risk of bankruptcy at the moment.
DHI's Altman-Z score of 5.83 is amongst the best of the industry. DHI outperforms 85.71% of its industry peers.
DHI has a debt to FCF ratio of 2.39. This is a good value and a sign of high solvency as DHI would need 2.39 years to pay back of all of its debts.
DHI has a better Debt to FCF ratio (2.39) than 74.60% of its industry peers.
DHI has a Debt/Equity ratio of 0.26. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.26, DHI perfoms like the industry average, outperforming 55.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 2.39 | ||
| Altman-Z | 5.83 |
ROIC/WACC1.62
WACC8.65%
2.3 Liquidity
A Current Ratio of 5.12 indicates that DHI has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 5.12, DHI is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
DHI has a Quick Ratio of 5.12. This is a bad value and indicates that DHI is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.51, DHI is not doing good in the industry: 68.25% of the companies in the same industry are doing better.
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 | 5.12 | ||
| Quick Ratio | 0.51 |
3. Growth
3.1 Past
The earnings per share for DHI have decreased strongly by -16.25% in the last year.
DHI shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 27.63% yearly.
The Revenue has been growing slightly by 3.78% in the past year.
Measured over the past years, DHI shows a quite strong growth in Revenue. The Revenue has been growing by 15.91% on average per year.
EPS 1Y (TTM)-16.25%
EPS 3Y7.75%
EPS 5Y27.63%
EPS Q2Q%-18.05%
Revenue 1Y (TTM)3.78%
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 9.99% on average per year.
Based on estimates for the next years, DHI will show a small growth in Revenue. The Revenue will grow by 4.46% on average per year.
EPS Next Y-19.31%
EPS Next 2Y-6.13%
EPS Next 3Y2.4%
EPS Next 5Y9.99%
Revenue Next Year-8.49%
Revenue Next 2Y-2.82%
Revenue Next 3Y1.08%
Revenue Next 5Y4.46%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
DHI is valuated reasonably with a Price/Earnings ratio of 11.65.
DHI's Price/Earnings is on the same level as the industry average.
DHI is valuated cheaply when we compare the Price/Earnings ratio to 28.05, which is the current average of the S&P500 Index.
DHI is valuated reasonably with a Price/Forward Earnings ratio of 11.49.
The rest of the industry has a similar Price/Forward Earnings ratio as DHI.
DHI's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 37.67.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.65 | ||
| Fwd PE | 11.49 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as DHI.
Based on the Price/Free Cash Flow ratio, DHI is valued a bit cheaper than the industry average as 71.43% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.36 | ||
| EV/EBITDA | 8.06 |
4.3 Compensation for Growth
DHI has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.42
EPS Next 2Y-6.13%
EPS Next 3Y2.4%
5. Dividend
5.1 Amount
DHI has a Yearly Dividend Yield of 1.10%. Purely for dividend investing, there may be better candidates out there.
DHI's Dividend Yield is a higher than the industry average which is at 3.16.
With a Dividend Yield of 1.10, DHI pays less dividend than the S&P500 average, which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.1% |
5.2 History
On average, the dividend of DHI grows each year by 14.84%, which is quite nice.
DHI has been paying a dividend for at least 10 years, so it has a reliable track record.
DHI has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)14.84%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
10.49% of the earnings are spent on dividend by DHI. This is a low number and sustainable payout ratio.
DHI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP10.49%
EPS Next 2Y-6.13%
EPS Next 3Y2.4%
145.32
+0.62 (+0.43%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners84.99%
Inst Owner Change0.21%
Ins Owners0.57%
Ins Owner Change2.66%
Market Cap44.64B
Analysts69.23
Price Target149.53 (2.9%)
Short Float %2.81%
Short Ratio2.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.1% |
Yearly Dividend1.2
Dividend Growth(5Y)14.84%
DP10.49%
Div Incr Years10
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.34%
Min EPS beat(2)-2.98%
Max EPS beat(2)9.66%
EPS beat(4)2
Avg EPS beat(4)2.01%
Min EPS beat(4)-6.87%
Max EPS beat(4)9.66%
EPS beat(8)5
Avg EPS beat(8)8.64%
EPS beat(12)8
Avg EPS beat(12)10.32%
EPS beat(16)12
Avg EPS beat(16)10.76%
Revenue beat(2)1
Avg Revenue beat(2)0.89%
Min Revenue beat(2)-4.66%
Max Revenue beat(2)6.43%
Revenue beat(4)2
Avg Revenue beat(4)0.02%
Min Revenue beat(4)-4.66%
Max Revenue beat(4)6.43%
Revenue beat(8)6
Avg Revenue beat(8)3.57%
Revenue beat(12)8
Avg Revenue beat(12)4.57%
Revenue beat(16)12
Avg Revenue beat(16)4.03%
PT rev (1m)-3.59%
PT rev (3m)-3.69%
EPS NQ rev (1m)-1.34%
EPS NQ rev (3m)-8.88%
EPS NY rev (1m)0%
EPS NY rev (3m)-6.77%
Revenue NQ rev (1m)-0.49%
Revenue NQ rev (3m)-6.06%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-2.19%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.65 | ||
| Fwd PE | 11.49 | ||
| P/S | 1.26 | ||
| P/FCF | 16.36 | ||
| P/OCF | 15.55 | ||
| P/B | 1.83 | ||
| P/tB | 1.85 | ||
| EV/EBITDA | 8.06 |
EPS(TTM)12.47
EY8.58%
EPS(NY)12.65
Fwd EY8.71%
FCF(TTM)8.88
FCFY6.11%
OCF(TTM)9.34
OCFY6.43%
SpS114.97
BVpS79.19
TBVpS78.66
PEG (NY)N/A
PEG (5Y)0.42
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.03% | ||
| ROE | 17.64% | ||
| ROCE | 19.26% | ||
| ROIC | 14% | ||
| ROICexc | 15.2% | ||
| ROICexgc | 16.95% | ||
| OM | 16.33% | ||
| PM (TTM) | 12.15% | ||
| GM | 25.72% | ||
| FCFM | 7.73% |
ROA(3y)15.68%
ROA(5y)15.4%
ROE(3y)23.3%
ROE(5y)23.6%
ROIC(3y)18.65%
ROIC(5y)18.07%
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-Score4
Asset Turnover0.99
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 2.39 | ||
| Debt/EBITDA | 1.09 | ||
| Cap/Depr | 149.53% | ||
| Cap/Sales | 0.4% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 48.96% | ||
| Profit Quality | 63.57% | ||
| Current Ratio | 5.12 | ||
| Quick Ratio | 0.51 | ||
| Altman-Z | 5.83 |
F-Score4
WACC8.65%
ROIC/WACC1.62
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 5Y9.99%
Revenue 1Y (TTM)3.78%
Revenue growth 3Y9.84%
Revenue growth 5Y15.91%
Sales Q2Q%-7.43%
Revenue Next Year-8.49%
Revenue Next 2Y-2.82%
Revenue Next 3Y1.08%
Revenue Next 5Y4.46%
EBIT growth 1Y-13.91%
EBIT growth 3Y5.48%
EBIT growth 5Y24.26%
EBIT Next Year-24.69%
EBIT Next 3Y-2.94%
EBIT Next 5Y3.36%
FCF growth 1Y0.5%
FCF growth 3Y96.46%
FCF growth 5Y24.83%
OCF growth 1Y0.01%
OCF growth 3Y60.02%
OCF growth 5Y19.67%