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. MTH has an excellent profitability rating, but 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.
MTH had a negative operating cash flow in the past year.
Each year in the past 5 years MTH has been profitable.
In multiple years MTH reported negative operating cash flow during the last 5 years.
1.2 Ratios
With a decent Return On Assets value of 9.39%, MTH is doing good in the industry, outperforming 68.75% of the companies in the same industry.
MTH's Return On Equity of 13.92% is fine compared to the rest of the industry. MTH outperforms 62.50% of its industry peers.
MTH has a better Return On Invested Capital (10.30%) than 67.19% of its industry peers.
The Average Return On Invested Capital over the past 3 years for MTH is above the industry average of 11.93%.
The 3 year average ROIC (15.00%) for MTH is well above the current ROIC(10.30%). The reason for the recent decline needs to be investigated.
| 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
With an excellent Profit Margin value of 11.50%, MTH belongs to the best of the industry, outperforming 85.94% of the companies in the same industry.
In the last couple of years the Profit Margin of MTH has grown nicely.
With an excellent Operating Margin value of 14.75%, MTH belongs to the best of the industry, outperforming 82.81% of the companies in the same industry.
In the last couple of years the Operating Margin of MTH has grown nicely.
Looking at the Gross Margin, with a value of 17.80%, MTH is doing worse than 81.25% of the companies in the same industry.
In the last couple of years the Gross Margin of MTH has grown nicely.
| 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so MTH is still creating some value.
The number of shares outstanding for MTH has been reduced compared to 1 year ago.
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 4.24. This indicates that MTH is financially healthy and has little risk of bankruptcy at the moment.
MTH's Altman-Z score of 4.24 is fine compared to the rest of the industry. MTH outperforms 70.31% of its industry peers.
MTH has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of MTH (0.35) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 4.24 |
ROIC/WACC1.14
WACC9.01%
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.
MTH's Current ratio of 10.56 is amongst the best of the industry. MTH outperforms 95.31% 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 better Quick ratio (1.90) than 85.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 10.56 | ||
| Quick Ratio | 1.9 |
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%.
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.
Looking at the last year, MTH shows a decrease in Revenue. The Revenue has decreased by -0.68% in the last year.
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)-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 1.98% yearly.
MTH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.93% yearly.
EPS Next Y-21.81%
EPS Next 2Y-7.24%
EPS Next 3Y1.98%
EPS Next 5YN/A
Revenue Next Year3.78%
Revenue Next 2Y5.67%
Revenue Next 3Y5.93%
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.
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 6.51, which indicates a rather cheap valuation of MTH.
79.69% of the companies in the same industry are more expensive than MTH, based on the Price/Earnings ratio.
MTH is valuated cheaply when we compare the Price/Earnings ratio to 25.91, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 6.98, the valuation of MTH can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MTH indicates a somewhat cheap valuation: MTH is cheaper than 78.13% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.85. MTH is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.51 | ||
| Fwd PE | 6.98 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MTH is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 5.69 |
4.3 Compensation for Growth
The decent profitability rating of MTH may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.24
EPS Next 2Y-7.24%
EPS Next 3Y1.98%
5. Dividend
5.1 Amount
MTH has a Yearly Dividend Yield of 2.30%. Purely for dividend investing, there may be better candidates out there.
MTH's Dividend Yield is rather good when compared to the industry average which is at 3.47. MTH pays more dividend than 84.38% of the companies in the same industry.
MTH's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
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.
MTH has decreased its dividend recently.
Dividend Growth(5Y)175.81%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
15.52% of the earnings are spent on dividend by MTH. This is a low number and sustainable payout ratio.
MTH's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP15.52%
EPS Next 2Y-7.24%
EPS Next 3Y1.98%
64.35
+0.28 (+0.44%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners101.69%
Inst Owner Change95.73%
Ins Owners3.11%
Ins Owner Change15.94%
Market Cap4.62B
Analysts71.25
Price Target93.34 (45.05%)
Short Float %3.67%
Short Ratio2.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
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)-7.05%
PT rev (3m)-10.97%
EPS NQ rev (1m)-16.88%
EPS NQ rev (3m)-18.28%
EPS NY rev (1m)-7.08%
EPS NY rev (3m)-13.83%
Revenue NQ rev (1m)-7.6%
Revenue NQ rev (3m)-8.75%
Revenue NY rev (1m)-2.58%
Revenue NY rev (3m)-2.96%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.51 | ||
| Fwd PE | 6.98 | ||
| P/S | 0.74 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.89 | ||
| P/tB | 0.9 | ||
| EV/EBITDA | 5.69 |
EPS(TTM)9.88
EY15.35%
EPS(NY)9.22
Fwd EY14.33%
FCF(TTM)-5.29
FCFYN/A
OCF(TTM)-4.9
OCFYN/A
SpS87.5
BVpS72.32
TBVpS71.86
PEG (NY)N/A
PEG (5Y)0.24
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 | 4.24 |
F-Score3
WACC9.01%
ROIC/WACC1.14
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-21.81%
EPS Next 2Y-7.24%
EPS Next 3Y1.98%
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 Year12.43%
EBIT Next 3Y10.79%
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