LENNAR CORP - B SHS (LEN.B) Stock Fundamental Analysis
NYSE:LEN.B - New York Stock Exchange, Inc. - US5260573028 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to LEN.B. LEN.B was compared to 64 industry peers in the Household Durables industry. LEN.B gets an excellent profitability rating and is at the same time showing great financial health properties. LEN.B has a correct valuation and a medium growth rate. These ratings would make LEN.B suitable for quality investing!
1. Profitability
1.1 Basic Checks
LEN.B had positive earnings in the past year.
LEN.B had a positive operating cash flow in the past year.
In the past 5 years LEN.B has always been profitable.
LEN.B had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 10.56%, LEN.B is in the better half of the industry, outperforming 78.13% of the companies in the same industry.
The Return On Equity of LEN.B (16.26%) is better than 70.31% of its industry peers.
Looking at the Return On Invested Capital, with a value of 11.43%, LEN.B is in the better half of the industry, outperforming 70.31% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for LEN.B is in line with the industry average of 12.29%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.56% | ||
| ROE | 16.26% | ||
| ROIC | 11.43% |
ROA(3y)10.45%
ROA(5y)10.53%
ROE(3y)15.85%
ROE(5y)16.42%
ROIC(3y)12.52%
ROIC(5y)11.96%
1.3 Margins
The Profit Margin of LEN.B (10.34%) is better than 81.25% of its industry peers.
LEN.B's Profit Margin has improved in the last couple of years.
LEN.B has a better Operating Margin (13.74%) than 79.69% of its industry peers.
In the last couple of years the Operating Margin of LEN.B has grown nicely.
LEN.B has a worse Gross Margin (15.21%) than 92.19% of its industry peers.
LEN.B's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.74% | ||
| PM (TTM) | 10.34% | ||
| GM | 15.21% |
OM growth 3Y-10.07%
OM growth 5Y2.56%
PM growth 3Y-12.02%
PM growth 5Y5.94%
GM growth 3Y-8.58%
GM growth 5Y3%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), LEN.B is creating some value.
The number of shares outstanding for LEN.B has been reduced compared to 1 year ago.
The number of shares outstanding for LEN.B has been reduced compared to 5 years ago.
Compared to 1 year ago, LEN.B has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 4.21 indicates that LEN.B is not in any danger for bankruptcy at the moment.
LEN.B's Altman-Z score of 4.21 is fine compared to the rest of the industry. LEN.B outperforms 70.31% of its industry peers.
The Debt to FCF ratio of LEN.B is 2.27, which is a good value as it means it would take LEN.B, 2.27 years of fcf income to pay off all of its debts.
LEN.B has a Debt to FCF ratio of 2.27. This is in the better half of the industry: LEN.B outperforms 71.88% of its industry peers.
LEN.B has a Debt/Equity ratio of 0.16. This is a healthy value indicating a solid balance between debt and equity.
LEN.B's Debt to Equity ratio of 0.16 is fine compared to the rest of the industry. LEN.B outperforms 71.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.16 | ||
| Debt/FCF | 2.27 | ||
| Altman-Z | 4.21 |
ROIC/WACC1.43
WACC8.01%
2.3 Liquidity
LEN.B has a Current Ratio of 8.37. This indicates that LEN.B is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of LEN.B (8.37) is better than 87.50% of its industry peers.
LEN.B has a Quick Ratio of 1.84. This is a normal value and indicates that LEN.B is financially healthy and should not expect problems in meeting its short term obligations.
LEN.B has a better Quick ratio (1.84) than 82.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 8.37 | ||
| Quick Ratio | 1.84 |
3. Growth
3.1 Past
The earnings per share for LEN.B have decreased by -3.78% in the last year.
The Earnings Per Share has been growing by 20.01% on average over the past years. This is a very strong growth
The Revenue has been growing slightly by 2.01% in the past year.
LEN.B shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.75% yearly.
EPS 1Y (TTM)-3.78%
EPS 3Y3.67%
EPS 5Y20.01%
EPS Q2Q%-23.74%
Revenue 1Y (TTM)2.01%
Revenue growth 3Y9.32%
Revenue growth 5Y9.75%
Sales Q2Q%4.36%
3.2 Future
The Earnings Per Share is expected to grow by 10.67% on average over the next years. This is quite good.
Based on estimates for the next years, LEN.B will show a small growth in Revenue. The Revenue will grow by 5.72% on average per year.
EPS Next Y-27.49%
EPS Next 2Y-7.5%
EPS Next 3Y3.23%
EPS Next 5Y10.67%
Revenue Next Year0.87%
Revenue Next 2Y2.53%
Revenue Next 3Y4.21%
Revenue Next 5Y5.72%
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
The Price/Earnings ratio is 7.61, which indicates a rather cheap valuation of LEN.B.
67.19% of the companies in the same industry are more expensive than LEN.B, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.22. LEN.B is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 8.51 indicates a reasonable valuation of LEN.B.
LEN.B's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. LEN.B is cheaper than 67.19% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.86. LEN.B is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.61 | ||
| Fwd PE | 8.51 |
4.2 Price Multiples
LEN.B's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. LEN.B is cheaper than 78.13% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as LEN.B.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.31 | ||
| EV/EBITDA | 5.6 |
4.3 Compensation for Growth
The decent profitability rating of LEN.B may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.38
EPS Next 2Y-7.5%
EPS Next 3Y3.23%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.85%, LEN.B has a reasonable but not impressive dividend return.
LEN.B's Dividend Yield is a higher than the industry average which is at 3.61.
Compared to the average S&P500 Dividend Yield of 2.44, LEN.B is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.85% |
5.2 History
On average, the dividend of LEN.B grows each year by 65.54%, which is quite nice.
LEN.B has been paying a dividend for at least 10 years, so it has a reliable track record.
LEN.B has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)65.54%
Div Incr Years1
Div Non Decr Years15
5.3 Sustainability
14.64% of the earnings are spent on dividend by LEN.B. This is a low number and sustainable payout ratio.
LEN.B's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP14.64%
EPS Next 2Y-7.5%
EPS Next 3Y3.23%
104.44
+1.8 (+1.75%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners96.41%
Inst Owner Change0.54%
Ins Owners1.77%
Ins Owner ChangeN/A
Market Cap27.55B
Analysts70
Price Target137.14 (31.31%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.85% |
Yearly Dividend2
Dividend Growth(5Y)65.54%
DP14.64%
Div Incr Years1
Div Non Decr Years15
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.28%
Min EPS beat(2)-3.31%
Max EPS beat(2)11.86%
EPS beat(4)3
Avg EPS beat(4)7.52%
Min EPS beat(4)-3.31%
Max EPS beat(4)16.11%
EPS beat(8)7
Avg EPS beat(8)10.85%
EPS beat(12)10
Avg EPS beat(12)10.69%
EPS beat(16)12
Avg EPS beat(16)7.75%
Revenue beat(2)1
Avg Revenue beat(2)-0.33%
Min Revenue beat(2)-2.32%
Max Revenue beat(2)1.66%
Revenue beat(4)3
Avg Revenue beat(4)0.71%
Min Revenue beat(4)-2.32%
Max Revenue beat(4)1.88%
Revenue beat(8)6
Avg Revenue beat(8)2.52%
Revenue beat(12)8
Avg Revenue beat(12)2.42%
Revenue beat(16)12
Avg Revenue beat(16)2.39%
PT rev (1m)-6.72%
PT rev (3m)-19.52%
EPS NQ rev (1m)-1.58%
EPS NQ rev (3m)-47.8%
EPS NY rev (1m)-4.54%
EPS NY rev (3m)-34.59%
Revenue NQ rev (1m)-0.64%
Revenue NQ rev (3m)-12.51%
Revenue NY rev (1m)-3.72%
Revenue NY rev (3m)-3.99%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.61 | ||
| Fwd PE | 8.51 | ||
| P/S | 0.77 | ||
| P/FCF | 17.31 | ||
| P/OCF | 15.77 | ||
| P/B | 1.21 | ||
| P/tB | 1.44 | ||
| EV/EBITDA | 5.6 |
EPS(TTM)13.73
EY13.15%
EPS(NY)12.27
Fwd EY11.75%
FCF(TTM)6.03
FCFY5.78%
OCF(TTM)6.62
OCFY6.34%
SpS135.56
BVpS86.16
TBVpS72.39
PEG (NY)N/A
PEG (5Y)0.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.56% | ||
| ROE | 16.26% | ||
| ROCE | 14.98% | ||
| ROIC | 11.43% | ||
| ROICexc | 12.38% | ||
| ROICexgc | 18.99% | ||
| OM | 13.74% | ||
| PM (TTM) | 10.34% | ||
| GM | 15.21% | ||
| FCFM | 4.45% |
ROA(3y)10.45%
ROA(5y)10.53%
ROE(3y)15.85%
ROE(5y)16.42%
ROIC(3y)12.52%
ROIC(5y)11.96%
ROICexc(3y)14.71%
ROICexc(5y)13.75%
ROICexgc(3y)18.6%
ROICexgc(5y)16.93%
ROCE(3y)16.4%
ROCE(5y)15.67%
ROICexcg growth 3Y-0.73%
ROICexcg growth 5Y10.92%
ROICexc growth 3Y-5.57%
ROICexc growth 5Y8.18%
OM growth 3Y-10.07%
OM growth 5Y2.56%
PM growth 3Y-12.02%
PM growth 5Y5.94%
GM growth 3Y-8.58%
GM growth 5Y3%
F-Score6
Asset Turnover1.02
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.16 | ||
| Debt/FCF | 2.27 | ||
| Debt/EBITDA | 0.72 | ||
| Cap/Depr | 129.15% | ||
| Cap/Sales | 0.43% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 34.71% | ||
| Profit Quality | 43.07% | ||
| Current Ratio | 8.37 | ||
| Quick Ratio | 1.84 | ||
| Altman-Z | 4.21 |
F-Score6
WACC8.01%
ROIC/WACC1.43
Cap/Depr(3y)101.58%
Cap/Depr(5y)91.5%
Cap/Sales(3y)0.32%
Cap/Sales(5y)0.3%
Profit Quality(3y)86.08%
Profit Quality(5y)96.72%
High Growth Momentum
Growth
EPS 1Y (TTM)-3.78%
EPS 3Y3.67%
EPS 5Y20.01%
EPS Q2Q%-23.74%
EPS Next Y-27.49%
EPS Next 2Y-7.5%
EPS Next 3Y3.23%
EPS Next 5Y10.67%
Revenue 1Y (TTM)2.01%
Revenue growth 3Y9.32%
Revenue growth 5Y9.75%
Sales Q2Q%4.36%
Revenue Next Year0.87%
Revenue Next 2Y2.53%
Revenue Next 3Y4.21%
Revenue Next 5Y5.72%
EBIT growth 1Y-14.59%
EBIT growth 3Y-1.69%
EBIT growth 5Y12.56%
EBIT Next Year-24.81%
EBIT Next 3Y0.46%
EBIT Next 5Y5.82%
FCF growth 1Y-62.63%
FCF growth 3Y-3.29%
FCF growth 5Y9.84%
OCF growth 1Y-59.54%
OCF growth 3Y-1.73%
OCF growth 5Y10.15%