MERITAGE HOMES CORP (MTH) Stock Fundamental Analysis
USA - NYSE:MTH - US59001A1025 - Common Stock
68.8 USD
-0.93 (-1.33%)
68.8 USD
0 (0%)
Taking everything into account, MTH scores 5 out of 10 in our fundamental rating. MTH was compared to 63 industry peers in the Household Durables industry. While MTH belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. MTH has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
MTH had positive earnings in the past year.
In the past year MTH has reported a negative cash flow from operations.
Each year in the past 5 years MTH has been profitable.
The reported operating cash flow has been mixed in the past 5 years: MTH reported negative operating cash flow in multiple years.
1.2 Ratios
MTH has a Return On Assets of 8.23%. This is in the better half of the industry: MTH outperforms 71.43% of its industry peers.
MTH's Return On Equity of 12.11% is fine compared to the rest of the industry. MTH outperforms 60.32% of its industry peers.
With a decent Return On Invested Capital value of 9.04%, MTH is doing good in the industry, outperforming 61.90% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for MTH is above the industry average of 10.32%.
The 3 year average ROIC (15.00%) for MTH is well above the current ROIC(9.04%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.23% | ||
| ROE | 12.11% | ||
| ROIC | 9.04% |
ROA(3y)13.26%
ROA(5y)13.22%
ROE(3y)18.81%
ROE(5y)19.74%
ROIC(3y)15%
ROIC(5y)15.05%
1.3 Margins
The Profit Margin of MTH (10.27%) is better than 84.13% of its industry peers.
In the last couple of years the Profit Margin of MTH has grown nicely.
MTH's Operating Margin of 13.22% is amongst the best of the industry. MTH outperforms 84.13% of its industry peers.
In the last couple of years the Operating Margin of MTH has grown nicely.
With a Gross Margin value of 16.34%, MTH is not doing good in the industry: 85.71% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of MTH has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.22% | ||
| PM (TTM) | 10.27% | ||
| GM | 16.34% |
OM growth 3Y-5.81%
OM growth 5Y13.51%
PM growth 3Y-5.01%
PM growth 5Y12.55%
GM growth 3Y-5.75%
GM growth 5Y9.07%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MTH is still creating some value.
Compared to 1 year ago, MTH has less shares outstanding
The number of shares outstanding for MTH has been reduced compared to 5 years ago.
Compared to 1 year ago, MTH has a worse debt to assets ratio.
2.2 Solvency
MTH has an Altman-Z score of 4.28. This indicates that MTH is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.28, MTH is in the better half of the industry, outperforming 68.25% of the companies in the same industry.
MTH has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
MTH has a Debt to Equity ratio (0.35) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 4.28 |
ROIC/WACC1.02
WACC8.89%
2.3 Liquidity
MTH has a Current Ratio of 10.86. This indicates that MTH is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of MTH (10.86) is better than 95.24% of its industry peers.
A Quick Ratio of 1.82 indicates that MTH should not have too much problems paying its short term obligations.
MTH has a Quick ratio of 1.82. This is in the better half of the industry: MTH outperforms 79.37% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 10.86 | ||
| Quick Ratio | 1.82 |
3. Growth
3.1 Past
The earnings per share for MTH have decreased strongly by -22.99% in the last year.
MTH shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 26.87% yearly.
MTH shows a decrease in Revenue. In the last year, the revenue decreased by -3.72%.
MTH shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.77% yearly.
EPS 1Y (TTM)-22.99%
EPS 3Y3.55%
EPS 5Y26.87%
EPS Q2Q%-35.34%
Revenue 1Y (TTM)-3.72%
Revenue growth 3Y7.54%
Revenue growth 5Y11.77%
Sales Q2Q%-3.56%
3.2 Future
Based on estimates for the next years, MTH will show a decrease in Earnings Per Share. The EPS will decrease by -5.38% on average per year.
MTH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.76% yearly.
EPS Next Y-31.79%
EPS Next 2Y-13.6%
EPS Next 3Y-5.38%
EPS Next 5YN/A
Revenue Next Year-4.51%
Revenue Next 2Y0.89%
Revenue Next 3Y1.76%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
The Price/Earnings ratio is 7.85, which indicates a rather cheap valuation of MTH.
79.37% of the companies in the same industry are more expensive than MTH, based on the Price/Earnings ratio.
MTH's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.91.
With a Price/Forward Earnings ratio of 8.60, the valuation of MTH can be described as very reasonable.
Based on the Price/Forward Earnings ratio, MTH is valued cheaply inside the industry as 82.54% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of MTH to the average of the S&P500 Index (23.30), we can say MTH is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.85 | ||
| Fwd PE | 8.6 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of MTH indicates a somewhat cheap valuation: MTH is cheaper than 71.43% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 6.84 |
4.3 Compensation for Growth
MTH has a very decent profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as MTH's earnings are expected to decrease with -5.38% in the coming years.
PEG (NY)N/A
PEG (5Y)0.29
EPS Next 2Y-13.6%
EPS Next 3Y-5.38%
5. Dividend
5.1 Amount
MTH has a Yearly Dividend Yield of 2.26%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 2.76, MTH pays a better dividend. On top of this MTH pays more dividend than 82.54% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, MTH has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.26% |
5.2 History
The dividend of MTH is nicely growing with an annual growth rate of 175.81%!
MTH has been paying a dividend for over 5 years, so it has already some track record.
MTH has decreased its dividend recently.
Dividend Growth(5Y)175.81%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
MTH pays out 18.11% of its income as dividend. This is a sustainable payout ratio.
DP18.11%
EPS Next 2Y-13.6%
EPS Next 3Y-5.38%
68.8
-0.93 (-1.33%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners103.71%
Inst Owner Change0%
Ins Owners2.24%
Ins Owner Change0.78%
Market Cap4.90B
Analysts75
Price Target91.44 (32.91%)
Short Float %4.93%
Short Ratio3.26
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.26% |
Yearly Dividend1.5
Dividend Growth(5Y)175.81%
DP18.11%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)1.28%
Min EPS beat(2)-0.6%
Max EPS beat(2)3.16%
EPS beat(4)2
Avg EPS beat(4)0.76%
Min EPS beat(4)-6.04%
Max EPS beat(4)6.52%
EPS beat(8)6
Avg EPS beat(8)10.55%
EPS beat(12)10
Avg EPS beat(12)14.09%
EPS beat(16)14
Avg EPS beat(16)14.05%
Revenue beat(2)2
Avg Revenue beat(2)1.59%
Min Revenue beat(2)1.08%
Max Revenue beat(2)2.09%
Revenue beat(4)4
Avg Revenue beat(4)1.27%
Min Revenue beat(4)0.1%
Max Revenue beat(4)2.09%
Revenue beat(8)8
Avg Revenue beat(8)4.25%
Revenue beat(12)11
Avg Revenue beat(12)5.61%
Revenue beat(16)13
Avg Revenue beat(16)4.6%
PT rev (1m)0.75%
PT rev (3m)-1.47%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-27.53%
EPS NY rev (1m)0%
EPS NY rev (3m)-13.05%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-15.53%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-7.98%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.85 | ||
| Fwd PE | 8.6 | ||
| P/S | 0.79 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.93 | ||
| P/tB | 0.94 | ||
| EV/EBITDA | 6.84 |
EPS(TTM)8.76
EY12.73%
EPS(NY)8
Fwd EY11.63%
FCF(TTM)-3.49
FCFYN/A
OCF(TTM)-3.1
OCFYN/A
SpS87.36
BVpS74.05
TBVpS73.26
PEG (NY)N/A
PEG (5Y)0.29
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.23% | ||
| ROE | 12.11% | ||
| ROCE | 11.58% | ||
| ROIC | 9.04% | ||
| ROICexc | 10.41% | ||
| ROICexgc | 10.9% | ||
| OM | 13.22% | ||
| PM (TTM) | 10.27% | ||
| GM | 16.34% | ||
| FCFM | N/A |
ROA(3y)13.26%
ROA(5y)13.22%
ROE(3y)18.81%
ROE(5y)19.74%
ROIC(3y)15%
ROIC(5y)15.05%
ROICexc(3y)17.65%
ROICexc(5y)17.95%
ROICexgc(3y)18.2%
ROICexgc(5y)18.52%
ROCE(3y)19.2%
ROCE(5y)19.27%
ROICexcg growth 3Y-13.71%
ROICexcg growth 5Y9%
ROICexc growth 3Y-13.77%
ROICexc growth 5Y8.56%
OM growth 3Y-5.81%
OM growth 5Y13.51%
PM growth 3Y-5.01%
PM growth 5Y12.55%
GM growth 3Y-5.75%
GM growth 5Y9.07%
F-Score3
Asset Turnover0.8
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 2.16 | ||
| Cap/Depr | 108.15% | ||
| Cap/Sales | 0.45% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 10.86 | ||
| Quick Ratio | 1.82 | ||
| Altman-Z | 4.28 |
F-Score3
WACC8.89%
ROIC/WACC1.02
Cap/Depr(3y)123.38%
Cap/Depr(5y)106.42%
Cap/Sales(3y)0.5%
Cap/Sales(5y)0.49%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-22.99%
EPS 3Y3.55%
EPS 5Y26.87%
EPS Q2Q%-35.34%
EPS Next Y-31.79%
EPS Next 2Y-13.6%
EPS Next 3Y-5.38%
EPS Next 5YN/A
Revenue 1Y (TTM)-3.72%
Revenue growth 3Y7.54%
Revenue growth 5Y11.77%
Sales Q2Q%-3.56%
Revenue Next Year-4.51%
Revenue Next 2Y0.89%
Revenue Next 3Y1.76%
Revenue Next 5YN/A
EBIT growth 1Y-23.65%
EBIT growth 3Y1.3%
EBIT growth 5Y26.86%
EBIT Next Year-9.67%
EBIT Next 3Y4.05%
EBIT Next 5YN/A
FCF growth 1Y-126.62%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-122.77%
OCF growth 3YN/A
OCF growth 5YN/A