MERITAGE HOMES CORP (MTH) Stock Fundamental Analysis
NYSE:MTH - New York Stock Exchange, Inc. - US59001A1025 - Common Stock - Currency: USD
Overall MTH gets a fundamental rating of 6 out of 10. We evaluated MTH against 63 industry peers in the Household Durables industry. While MTH has a great profitability rating, there are some minor concerns on its financial health. MTH is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year MTH was profitable.
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 9.39%. This is in the better half of the industry: MTH outperforms 71.43% of its industry peers.
The Return On Equity of MTH (13.92%) is better than 63.49% of its industry peers.
MTH's Return On Invested Capital of 10.30% is fine compared to the rest of the industry. MTH outperforms 66.67% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MTH is above the industry average of 10.55%.
The last Return On Invested Capital (10.30%) for MTH is well below the 3 year average (15.00%), which needs to be investigated, but indicates that MTH had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.39% | ||
| ROE | 13.92% | ||
| ROIC | 10.3% |
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
MTH has a Profit Margin of 11.50%. This is amongst the best in the industry. MTH outperforms 87.30% of its industry peers.
MTH's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 14.75%, MTH belongs to the best of the industry, outperforming 84.13% of the companies in the same industry.
In the last couple of years the Operating Margin of MTH has grown nicely.
The Gross Margin of MTH (17.80%) is worse than 82.54% of its industry peers.
MTH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.75% | ||
| PM (TTM) | 11.5% | ||
| GM | 17.8% |
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), MTH is creating some value.
Compared to 1 year ago, MTH has less shares outstanding
MTH has less shares outstanding than it did 5 years ago.
MTH has a worse debt/assets ratio than last year.
2.2 Solvency
MTH has an Altman-Z score of 4.43. This indicates that MTH is financially healthy and has little risk of bankruptcy at the moment.
MTH's Altman-Z score of 4.43 is fine compared to the rest of the industry. MTH outperforms 73.02% of its industry peers.
A Debt/Equity ratio of 0.35 indicates that MTH is not too dependend on debt financing.
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 | 4.43 |
ROIC/WACC1.21
WACC8.49%
2.3 Liquidity
MTH has a Current Ratio of 10.56. This indicates that MTH is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of MTH (10.56) is better than 95.24% of its industry peers.
A Quick Ratio of 1.90 indicates that MTH should not have too much problems paying its short term obligations.
MTH has a Quick ratio of 1.90. This is amongst the best in the industry. MTH outperforms 82.54% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 10.56 | ||
| Quick Ratio | 1.9 |
3. Growth
3.1 Past
The earnings per share for MTH have decreased by -7.97% in the last year.
Measured over the past years, MTH shows a very strong growth in Earnings Per Share. The EPS has been growing by 26.87% on average per year.
MTH shows a decrease in Revenue. In the last year, the revenue decreased by -0.68%.
Measured over the past years, MTH shows a quite strong growth in Revenue. The Revenue has been growing by 11.77% on average per year.
EPS 1Y (TTM)-7.97%
EPS 3Y3.55%
EPS 5Y26.87%
EPS Q2Q%-33.2%
Revenue 1Y (TTM)-0.68%
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 1.48% yearly.
The Revenue is expected to grow by 5.93% on average over the next years.
EPS Next Y-21.55%
EPS Next 2Y-6.88%
EPS Next 3Y1.48%
EPS Next 5YN/A
Revenue Next Year3.78%
Revenue Next 2Y5.67%
Revenue Next 3Y5.93%
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
The Price/Earnings ratio is 7.47, which indicates a rather cheap valuation of MTH.
Compared to the rest of the industry, the Price/Earnings ratio of MTH indicates a rather cheap valuation: MTH is cheaper than 80.95% of the companies listed in the same industry.
MTH is valuated cheaply when we compare the Price/Earnings ratio to 27.30, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 7.94, which indicates a rather cheap valuation of MTH.
Based on the Price/Forward Earnings ratio, MTH is valued cheaply inside the industry as 80.95% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 21.76. MTH is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.47 | ||
| Fwd PE | 7.94 |
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 | 6.55 |
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)0.28
EPS Next 2Y-6.88%
EPS Next 3Y1.48%
5. Dividend
5.1 Amount
MTH has a Yearly Dividend Yield of 2.28%.
Compared to an average industry Dividend Yield of 3.26, MTH pays a better dividend. On top of this MTH pays more dividend than 84.13% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.37, MTH has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.28% |
5.2 History
On average, the dividend of MTH grows each year by 175.81%, which is quite nice.
MTH has been paying a dividend for over 5 years, so it has already some track record.
The dividend of MTH decreased recently.
Dividend Growth(5Y)175.81%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
MTH pays out 15.52% of its income as dividend. This is a sustainable payout ratio.
The dividend of MTH is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP15.52%
EPS Next 2Y-6.88%
EPS Next 3Y1.48%
73.77
-1.59 (-2.11%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners101.2%
Inst Owner Change0.13%
Ins Owners2.21%
Ins Owner Change16.39%
Market Cap5.30B
Analysts74.12
Price Target92.8 (25.8%)
Short Float %4.49%
Short Ratio3.62
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.28% |
Yearly Dividend1.5
Dividend Growth(5Y)175.81%
DP15.52%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.32%
Min EPS beat(2)-6.04%
Max EPS beat(2)-0.6%
EPS beat(4)2
Avg EPS beat(4)5.13%
Min EPS beat(4)-6.04%
Max EPS beat(4)20.63%
EPS beat(8)6
Avg EPS beat(8)15.47%
EPS beat(12)10
Avg EPS beat(12)15%
EPS beat(16)14
Avg EPS beat(16)15.37%
Revenue beat(2)2
Avg Revenue beat(2)1.18%
Min Revenue beat(2)0.56%
Max Revenue beat(2)1.8%
Revenue beat(4)4
Avg Revenue beat(4)2.3%
Min Revenue beat(4)0.1%
Max Revenue beat(4)6.73%
Revenue beat(8)8
Avg Revenue beat(8)6.2%
Revenue beat(12)10
Avg Revenue beat(12)5.35%
Revenue beat(16)13
Avg Revenue beat(16)5.09%
PT rev (1m)-0.58%
PT rev (3m)-7.59%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-16.88%
EPS NY rev (1m)0.33%
EPS NY rev (3m)-10.77%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-7.6%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 7.47 | ||
| Fwd PE | 7.94 | ||
| P/S | 0.84 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.02 | ||
| P/tB | 1.03 | ||
| EV/EBITDA | 6.55 |
EPS(TTM)9.88
EY13.39%
EPS(NY)9.29
Fwd EY12.59%
FCF(TTM)-5.29
FCFYN/A
OCF(TTM)-4.9
OCFYN/A
SpS87.5
BVpS72.32
TBVpS71.86
PEG (NY)N/A
PEG (5Y)0.28
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.39% | ||
| ROE | 13.92% | ||
| ROCE | 13.19% | ||
| ROIC | 10.3% | ||
| ROICexc | 12.03% | ||
| ROICexgc | 12.63% | ||
| OM | 14.75% | ||
| PM (TTM) | 11.5% | ||
| GM | 17.8% | ||
| 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 Turnover0.82
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.93 | ||
| Cap/Depr | 108.2% | ||
| Cap/Sales | 0.45% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 10.56 | ||
| Quick Ratio | 1.9 | ||
| Altman-Z | 4.43 |
F-Score3
WACC8.49%
ROIC/WACC1.21
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-21.55%
EPS Next 2Y-6.88%
EPS Next 3Y1.48%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.68%
Revenue growth 3Y7.54%
Revenue growth 5Y11.77%
Sales Q2Q%-7.55%
Revenue Next Year3.78%
Revenue Next 2Y5.67%
Revenue Next 3Y5.93%
Revenue Next 5YN/A
EBIT growth 1Y-9.47%
EBIT growth 3Y1.3%
EBIT growth 5Y26.86%
EBIT Next Year-0.76%
EBIT Next 3Y8.13%
EBIT Next 5YN/A
FCF growth 1Y-177.87%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-168.03%
OCF growth 3YN/A
OCF growth 5YN/A