KB HOME (KBH) Stock Fundamental Analysis
NYSE:KBH - New York Stock Exchange, Inc. - US48666K1097 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to KBH. KBH was compared to 64 industry peers in the Household Durables industry. While KBH is still in line with the averages on profitability rating, there are concerns on its financial health. KBH has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
KBH had positive earnings in the past year.
KBH had a negative operating cash flow in the past year.
In the past 5 years KBH has always been profitable.
Of the past 5 years KBH 4 years had a positive operating cash flow.
1.2 Ratios
KBH has a Return On Assets of 8.90%. This is in the better half of the industry: KBH outperforms 64.06% of its industry peers.
KBH has a better Return On Equity (15.18%) than 64.06% of its industry peers.
KBH has a Return On Invested Capital of 9.83%. This is in the better half of the industry: KBH outperforms 64.06% of its industry peers.
KBH had an Average Return On Invested Capital over the past 3 years of 11.76%. This is in line with the industry average of 11.93%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.9% | ||
| ROE | 15.18% | ||
| ROIC | 9.83% |
ROA(3y)10.13%
ROA(5y)9.11%
ROE(3y)17.86%
ROE(5y)16.65%
ROIC(3y)11.76%
ROIC(5y)10.39%
1.3 Margins
The Profit Margin of KBH (9.07%) is better than 71.88% of its industry peers.
KBH's Profit Margin has improved in the last couple of years.
KBH's Operating Margin of 11.00% is in line compared to the rest of the industry. KBH outperforms 59.38% of its industry peers.
In the last couple of years the Operating Margin of KBH has grown nicely.
The Gross Margin of KBH (21.03%) is worse than 71.88% of its industry peers.
KBH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 11% | ||
| PM (TTM) | 9.07% | ||
| GM | 21.03% |
OM growth 3Y-1.36%
OM growth 5Y8.57%
PM growth 3Y-1.51%
PM growth 5Y9.84%
GM growth 3Y-0.91%
GM growth 5Y2.86%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so KBH is still creating some value.
Compared to 1 year ago, KBH has less shares outstanding
Compared to 5 years ago, KBH has less shares outstanding
The debt/assets ratio for KBH has been reduced compared to a year ago.
2.2 Solvency
KBH has a Debt/Equity ratio of 0.44. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.44, KBH is doing worse than 60.94% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | N/A | ||
| Altman-Z | N/A |
ROIC/WACC1.13
WACC8.71%
2.3 Liquidity
A Current Ratio of 5.99 indicates that KBH has no problem at all paying its short term obligations.
KBH has a Current ratio of 5.99. This is in the better half of the industry: KBH outperforms 79.69% of its industry peers.
KBH has a Quick Ratio of 5.99. This is a bad value and indicates that KBH is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.56, KBH is doing worse than 68.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.99 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
KBH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.56%, which is quite good.
Measured over the past years, KBH shows a very strong growth in Earnings Per Share. The EPS has been growing by 24.25% on average per year.
The Revenue has been growing slightly by 5.54% in the past year.
KBH shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.77% yearly.
EPS 1Y (TTM)11.56%
EPS 3Y11.99%
EPS 5Y24.25%
EPS Q2Q%-15.34%
Revenue 1Y (TTM)5.54%
Revenue growth 3Y6.58%
Revenue growth 5Y8.77%
Sales Q2Q%-5.18%
3.2 Future
KBH is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.17% yearly.
The Revenue is expected to grow by 0.60% on average over the next years.
EPS Next Y-16.22%
EPS Next 2Y-5.89%
EPS Next 3Y1.17%
EPS Next 5YN/A
Revenue Next Year-4.84%
Revenue Next 2Y-3.27%
Revenue Next 3Y0.6%
Revenue Next 5YN/A
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.
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
Based on the Price/Earnings ratio of 6.27, the valuation of KBH can be described as very cheap.
KBH's Price/Earnings ratio is rather cheap when compared to the industry. KBH is cheaper than 85.94% of the companies in the same industry.
KBH's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 26.03.
With a Price/Forward Earnings ratio of 6.85, the valuation of KBH can be described as very cheap.
KBH's Price/Forward Earnings ratio is rather cheap when compared to the industry. KBH is cheaper than 81.25% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.94, KBH is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.27 | ||
| Fwd PE | 6.85 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of KBH indicates a somewhat cheap valuation: KBH is cheaper than 65.63% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 6.75 |
4.3 Compensation for Growth
The decent profitability rating of KBH may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.26
EPS Next 2Y-5.89%
EPS Next 3Y1.17%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.84%, KBH has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.47, KBH pays a bit more dividend than its industry peers.
KBH's Dividend Yield is slightly below the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.84% |
5.2 History
The dividend of KBH is nicely growing with an annual growth rate of 34.29%!
KBH has been paying a dividend for at least 10 years, so it has a reliable track record.
KBH has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)34.29%
Div Incr Years2
Div Non Decr Years11
5.3 Sustainability
KBH pays out 11.99% of its income as dividend. This is a sustainable payout ratio.
KBH's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP11.99%
EPS Next 2Y-5.89%
EPS Next 3Y1.17%
51.38
-1.83 (-3.44%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners106.29%
Inst Owner Change-4.66%
Ins Owners3.05%
Ins Owner Change7.46%
Market Cap3.69B
Analysts65.26
Price Target67.13 (30.65%)
Short Float %5.48%
Short Ratio2.43
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.84% |
Yearly Dividend0.92
Dividend Growth(5Y)34.29%
DP11.99%
Div Incr Years2
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.37%
Min EPS beat(2)-6.73%
Max EPS beat(2)1.99%
EPS beat(4)2
Avg EPS beat(4)2.93%
Min EPS beat(4)-6.73%
Max EPS beat(4)18.2%
EPS beat(8)6
Avg EPS beat(8)12.49%
EPS beat(12)9
Avg EPS beat(12)10.95%
EPS beat(16)11
Avg EPS beat(16)8.92%
Revenue beat(2)0
Avg Revenue beat(2)-4.21%
Min Revenue beat(2)-8.07%
Max Revenue beat(2)-0.35%
Revenue beat(4)2
Avg Revenue beat(4)-1.37%
Min Revenue beat(4)-8.07%
Max Revenue beat(4)2.51%
Revenue beat(8)5
Avg Revenue beat(8)3.15%
Revenue beat(12)7
Avg Revenue beat(12)2.37%
Revenue beat(16)7
Avg Revenue beat(16)0.37%
PT rev (1m)-2.49%
PT rev (3m)-13.31%
EPS NQ rev (1m)-0.41%
EPS NQ rev (3m)-25.52%
EPS NY rev (1m)-0.43%
EPS NY rev (3m)-16.04%
Revenue NQ rev (1m)-0.33%
Revenue NQ rev (3m)-13.92%
Revenue NY rev (1m)-1.28%
Revenue NY rev (3m)-8%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.27 | ||
| Fwd PE | 6.85 | ||
| P/S | 0.54 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.9 | ||
| P/tB | 0.9 | ||
| EV/EBITDA | 6.75 |
EPS(TTM)8.2
EY15.96%
EPS(NY)7.5
Fwd EY14.6%
FCF(TTM)-0.57
FCFYN/A
OCF(TTM)0
OCFYN/A
SpS95.55
BVpS57.06
TBVpS57.06
PEG (NY)N/A
PEG (5Y)0.26
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.9% | ||
| ROE | 15.18% | ||
| ROCE | 12.81% | ||
| ROIC | 9.83% | ||
| ROICexc | 10.3% | ||
| ROICexgc | 10.49% | ||
| OM | 11% | ||
| PM (TTM) | 9.07% | ||
| GM | 21.03% | ||
| FCFM | N/A |
ROA(3y)10.13%
ROA(5y)9.11%
ROE(3y)17.86%
ROE(5y)16.65%
ROIC(3y)11.76%
ROIC(5y)10.39%
ROICexc(3y)12.99%
ROICexc(5y)11.48%
ROICexgc(3y)13.14%
ROICexgc(5y)11.64%
ROCE(3y)15.32%
ROCE(5y)13.54%
ROICexcg growth 3Y-0.18%
ROICexcg growth 5Y10.13%
ROICexc growth 3Y-0.09%
ROICexc growth 5Y10.42%
OM growth 3Y-1.36%
OM growth 5Y8.57%
PM growth 3Y-1.51%
PM growth 5Y9.84%
GM growth 3Y-0.91%
GM growth 5Y2.86%
F-Score3
Asset Turnover0.98
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.44 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 2.27 | ||
| Cap/Depr | 111.77% | ||
| Cap/Sales | 0.6% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 5.99 | ||
| Quick Ratio | 0.56 | ||
| Altman-Z | N/A |
F-Score3
WACC8.71%
ROIC/WACC1.13
Cap/Depr(3y)114.28%
Cap/Depr(5y)116.39%
Cap/Sales(3y)0.59%
Cap/Sales(5y)0.63%
Profit Quality(3y)81.83%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)11.56%
EPS 3Y11.99%
EPS 5Y24.25%
EPS Q2Q%-15.34%
EPS Next Y-16.22%
EPS Next 2Y-5.89%
EPS Next 3Y1.17%
EPS Next 5YN/A
Revenue 1Y (TTM)5.54%
Revenue growth 3Y6.58%
Revenue growth 5Y8.77%
Sales Q2Q%-5.18%
Revenue Next Year-4.84%
Revenue Next 2Y-3.27%
Revenue Next 3Y0.6%
Revenue Next 5YN/A
EBIT growth 1Y1.36%
EBIT growth 3Y5.13%
EBIT growth 5Y18.09%
EBIT Next Year1.18%
EBIT Next 3Y3.89%
EBIT Next 5YN/A
FCF growth 1Y-108.5%
FCF growth 3YN/A
FCF growth 5Y8.96%
OCF growth 1Y-100.02%
OCF growth 3YN/A
OCF growth 5Y7.64%