MERITAGE HOMES CORP (MTH) Stock Fundamental Analysis
NYSE:MTH - New York Stock Exchange, Inc. - US59001A1025 - Common Stock - Currency: USD
Taking everything into account, MTH scores 6 out of 10 in our fundamental rating. MTH was compared to 64 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 correct valuation and a medium growth rate.
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.
In the past 5 years MTH has always 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 10.98%. This is in the better half of the industry: MTH outperforms 79.69% of its industry peers.
Looking at the Return On Equity, with a value of 15.29%, MTH is in the better half of the industry, outperforming 65.63% of the companies in the same industry.
The Return On Invested Capital of MTH (12.12%) is better than 73.44% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MTH is above the industry average of 12.29%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.98% | ||
| ROE | 15.29% | ||
| ROIC | 12.12% |
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
With an excellent Profit Margin value of 12.29%, MTH belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
MTH's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 15.72%, MTH belongs to the top of the industry, outperforming 85.94% of the companies in the same industry.
MTH's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 18.63%, MTH is doing worse than 79.69% of the companies in the same industry.
MTH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.72% | ||
| PM (TTM) | 12.29% | ||
| GM | 18.63% |
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
MTH has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
The number of shares outstanding for MTH has been reduced compared to 1 year ago.
Compared to 5 years ago, MTH has less shares outstanding
Compared to 1 year ago, MTH has a worse debt to assets ratio.
2.2 Solvency
MTH has an Altman-Z score of 4.78. This indicates that MTH is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 4.78, MTH is doing good in the industry, outperforming 78.13% of the companies in the same industry.
A Debt/Equity ratio of 0.26 indicates that MTH is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.26, MTH is in line with its industry, outperforming 53.13% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 4.78 |
ROIC/WACC1.47
WACC8.26%
2.3 Liquidity
A Current Ratio of 9.69 indicates that MTH has no problem at all paying its short term obligations.
With an excellent Current ratio value of 9.69, MTH belongs to the best of the industry, outperforming 92.19% of the companies in the same industry.
MTH has a Quick Ratio of 1.32. This is a normal value and indicates that MTH is financially healthy and should not expect problems in meeting its short term obligations.
MTH has a better Quick ratio (1.32) than 70.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 9.69 | ||
| Quick Ratio | 1.32 |
3. Growth
3.1 Past
MTH shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -7.97%.
The Earnings Per Share has been growing by 26.87% on average over the past years. This is a very strong growth
MTH shows a small growth in Revenue. In the last year, the Revenue has grown by 4.18%.
The Revenue has been growing by 11.77% on average over the past years. This is quite good.
EPS 1Y (TTM)-7.97%
EPS 3Y3.55%
EPS 5Y26.87%
EPS Q2Q%-33.2%
Revenue 1Y (TTM)4.18%
Revenue growth 3Y7.54%
Revenue growth 5Y11.77%
Sales Q2Q%-7.55%
3.2 Future
MTH is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 2.58% yearly.
Based on estimates for the next years, MTH will show a small growth in Revenue. The Revenue will grow by 5.74% on average per year.
EPS Next Y-15.85%
EPS Next 2Y-0.93%
EPS Next 3Y2.58%
EPS Next 5YN/A
Revenue Next Year3.82%
Revenue Next 2Y6.46%
Revenue Next 3Y5.74%
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.
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
Based on the Price/Earnings ratio of 6.78, the valuation of MTH can be described as very cheap.
73.44% of the companies in the same industry are more expensive than MTH, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.88. MTH is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 6.37 indicates a rather cheap valuation of MTH.
81.25% of the companies in the same industry are more expensive than MTH, based on the Price/Forward Earnings ratio.
MTH's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.20.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.78 | ||
| Fwd PE | 6.37 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MTH is valued cheaply inside the industry as 84.38% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 5.41 |
4.3 Compensation for Growth
MTH has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.25
EPS Next 2Y-0.93%
EPS Next 3Y2.58%
5. Dividend
5.1 Amount
MTH has a Yearly Dividend Yield of 2.32%.
Compared to an average industry Dividend Yield of 3.61, MTH pays a better dividend. On top of this MTH pays more dividend than 84.38% of the companies listed in the same industry.
MTH's Dividend Yield is comparable with the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.32% |
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
13.81% of the earnings are spent on dividend by MTH. This is a low number and sustainable payout ratio.
The dividend of MTH is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP13.81%
EPS Next 2Y-0.93%
EPS Next 3Y2.58%
66.95
-1.19 (-1.75%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners101.69%
Inst Owner Change3.34%
Ins Owners3.11%
Ins Owner Change15.94%
Market Cap4.81B
Analysts70
Price Target98.63 (47.32%)
Short Float %3.32%
Short Ratio2.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.32% |
Yearly Dividend1.5
Dividend Growth(5Y)175.81%
DP13.81%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.24%
Min EPS beat(2)-6.04%
Max EPS beat(2)6.52%
EPS beat(4)3
Avg EPS beat(4)15.82%
Min EPS beat(4)-6.04%
Max EPS beat(4)42.18%
EPS beat(8)7
Avg EPS beat(8)19.65%
EPS beat(12)11
Avg EPS beat(12)16.9%
EPS beat(16)15
Avg EPS beat(16)17.81%
Revenue beat(2)2
Avg Revenue beat(2)0.95%
Min Revenue beat(2)0.1%
Max Revenue beat(2)1.8%
Revenue beat(4)4
Avg Revenue beat(4)5.39%
Min Revenue beat(4)0.1%
Max Revenue beat(4)12.95%
Revenue beat(8)8
Avg Revenue beat(8)8.78%
Revenue beat(12)10
Avg Revenue beat(12)5.51%
Revenue beat(16)13
Avg Revenue beat(16)5.24%
PT rev (1m)-3.37%
PT rev (3m)-54.7%
EPS NQ rev (1m)-1.56%
EPS NQ rev (3m)-57.81%
EPS NY rev (1m)-4.29%
EPS NY rev (3m)-58.22%
Revenue NQ rev (1m)0.45%
Revenue NQ rev (3m)-6.64%
Revenue NY rev (1m)-2.53%
Revenue NY rev (3m)-4.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.78 | ||
| Fwd PE | 6.37 | ||
| P/S | 0.75 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.94 | ||
| P/tB | 0.94 | ||
| EV/EBITDA | 5.41 |
EPS(TTM)9.88
EY14.76%
EPS(NY)10.52
Fwd EY15.71%
FCF(TTM)-3.57
FCFYN/A
OCF(TTM)-3.17
OCFYN/A
SpS89.03
BVpS71.58
TBVpS71.12
PEG (NY)N/A
PEG (5Y)0.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.98% | ||
| ROE | 15.29% | ||
| ROCE | 15.52% | ||
| ROIC | 12.12% | ||
| ROICexc | 13.48% | ||
| ROICexgc | 14.02% | ||
| OM | 15.72% | ||
| PM (TTM) | 12.29% | ||
| GM | 18.63% | ||
| 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-Score4
Asset Turnover0.89
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.3 | ||
| Cap/Depr | 110.4% | ||
| Cap/Sales | 0.45% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 9.69 | ||
| Quick Ratio | 1.32 | ||
| Altman-Z | 4.78 |
F-Score4
WACC8.26%
ROIC/WACC1.47
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)-7.97%
EPS 3Y3.55%
EPS 5Y26.87%
EPS Q2Q%-33.2%
EPS Next Y-15.85%
EPS Next 2Y-0.93%
EPS Next 3Y2.58%
EPS Next 5YN/A
Revenue 1Y (TTM)4.18%
Revenue growth 3Y7.54%
Revenue growth 5Y11.77%
Sales Q2Q%-7.55%
Revenue Next Year3.82%
Revenue Next 2Y6.46%
Revenue Next 3Y5.74%
Revenue Next 5YN/A
EBIT growth 1Y5.74%
EBIT growth 3Y1.3%
EBIT growth 5Y26.86%
EBIT Next Year12.43%
EBIT Next 3Y10.79%
EBIT Next 5YN/A
FCF growth 1Y-180.73%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-164%
OCF growth 3YN/A
OCF growth 5YN/A