DR HORTON INC (DHI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DHI - US23331A1097 - Common Stock
150.51 USD
-5.23 (-3.36%)
150.29 USD
-0.22 (-0.15%)
We assign a fundamental rating of 6 out of 10 to DHI. DHI was compared to 60 industry peers in the Household Durables industry. While DHI has a great profitability rating, there are some minor concerns on its financial health. DHI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- DHI had positive earnings in the past year.
- In the past year DHI had a positive cash flow from operations.
- Each year in the past 5 years DHI has been profitable.
- DHI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- DHI has a Return On Assets of 10.11%. This is amongst the best in the industry. DHI outperforms 85.00% of its industry peers.
- Looking at the Return On Equity, with a value of 14.82%, DHI is in the better half of the industry, outperforming 68.33% of the companies in the same industry.
- DHI has a better Return On Invested Capital (12.10%) than 83.33% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for DHI is significantly above the industry average of 9.71%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.11% | ||
| ROE | 14.82% | ||
| ROIC | 12.1% |
ROA(3y)12.62%
ROA(5y)14.91%
ROE(3y)18.17%
ROE(5y)22.55%
ROIC(3y)14.99%
ROIC(5y)17.72%
1.3 Margins
- With an excellent Profit Margin value of 10.47%, DHI belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
- In the last couple of years the Profit Margin of DHI has declined.
- DHI's Operating Margin of 14.19% is amongst the best of the industry. DHI outperforms 85.00% of its industry peers.
- DHI's Operating Margin has been stable in the last couple of years.
- The Gross Margin of DHI (24.03%) is comparable to the rest of the industry.
- In the last couple of years the Gross Margin of DHI has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.19% | ||
| PM (TTM) | 10.47% | ||
| GM | 24.03% |
OM growth 3Y-14.91%
OM growth 5Y-0.59%
PM growth 3Y-15.74%
PM growth 5Y-2.18%
GM growth 3Y-8.68%
GM growth 5Y-0.33%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DHI is still creating some value.
- Compared to 1 year ago, DHI has less shares outstanding
- Compared to 5 years ago, DHI has less shares outstanding
- The debt/assets ratio for DHI is higher compared to a year ago.
2.2 Solvency
- DHI has an Altman-Z score of 5.83. This indicates that DHI is financially healthy and has little risk of bankruptcy at the moment.
- The Altman-Z score of DHI (5.83) is better than 83.33% of its industry peers.
- The Debt to FCF ratio of DHI is 1.82, which is an excellent value as it means it would take DHI, only 1.82 years of fcf income to pay off all of its debts.
- DHI has a Debt to FCF ratio of 1.82. This is in the better half of the industry: DHI outperforms 71.67% of its industry peers.
- A Debt/Equity ratio of 0.24 indicates that DHI is not too dependend on debt financing.
- DHI has a Debt to Equity ratio (0.24) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.24 | ||
| Debt/FCF | 1.82 | ||
| Altman-Z | 5.83 |
ROIC/WACC1.3
WACC9.32%
2.3 Liquidity
- A Current Ratio of 4.66 indicates that DHI has no problem at all paying its short term obligations.
- The Current ratio of DHI (4.66) is better than 70.00% of its industry peers.
- DHI has a Quick Ratio of 4.66. This is a bad value and indicates that DHI is not financially healthy enough and could expect problems in meeting its short term obligations.
- DHI has a Quick ratio of 0.56. This is in the lower half of the industry: DHI underperforms 71.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 4.66 | ||
| Quick Ratio | 0.56 |
3. Growth
3.1 Past
- DHI shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -22.19%.
- The Earnings Per Share has been growing by 12.86% on average over the past years. This is quite good.
- Looking at the last year, DHI shows a decrease in Revenue. The Revenue has decreased by -6.93% in the last year.
- The Revenue has been growing by 11.02% on average over the past years. This is quite good.
EPS 1Y (TTM)-22.19%
EPS 3Y-11.18%
EPS 5Y12.86%
EPS Q2Q%-22.22%
Revenue 1Y (TTM)-6.93%
Revenue growth 3Y0.76%
Revenue growth 5Y11.02%
Sales Q2Q%-9.54%
3.2 Future
- The Earnings Per Share is expected to grow by 19.04% on average over the next years. This is quite good.
- The Revenue is expected to grow by 7.20% on average over the next years.
EPS Next Y-1.14%
EPS Next 2Y7.54%
EPS Next 3Y12.1%
EPS Next 5Y19.04%
Revenue Next Year-0.1%
Revenue Next 2Y2.77%
Revenue Next 3Y4.72%
Revenue Next 5Y7.2%
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 accelerating.
- 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
- A Price/Earnings ratio of 13.67 indicates a correct valuation of DHI.
- Compared to the rest of the industry, the Price/Earnings ratio of DHI is on the same level as its industry peers.
- DHI's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.21.
- A Price/Forward Earnings ratio of 11.23 indicates a reasonable valuation of DHI.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of DHI indicates a somewhat cheap valuation: DHI is cheaper than 71.67% of the companies listed in the same industry.
- DHI is valuated cheaply when we compare the Price/Forward Earnings ratio to 24.26, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.67 | ||
| Fwd PE | 11.23 |
4.2 Price Multiples
- DHI's Enterprise Value to EBITDA ratio is in line with the industry average.
- Based on the Price/Free Cash Flow ratio, DHI is valued a bit cheaper than 70.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.39 | ||
| EV/EBITDA | 9.48 |
4.3 Compensation for Growth
- The decent profitability rating of DHI may justify a higher PE ratio.
- DHI's earnings are expected to grow with 12.10% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)1.06
EPS Next 2Y7.54%
EPS Next 3Y12.1%
5. Dividend
5.1 Amount
- DHI has a Yearly Dividend Yield of 1.16%. Purely for dividend investing, there may be better candidates out there.
- DHI's Dividend Yield is a higher than the industry average which is at 1.16.
- Compared to the average S&P500 Dividend Yield of 1.81, DHI is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.16% |
5.2 History
- The dividend of DHI is nicely growing with an annual growth rate of 18.00%!
- DHI has paid a dividend for at least 10 years, which is a reliable track record.
- DHI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)18%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
- 13.80% of the earnings are spent on dividend by DHI. This is a low number and sustainable payout ratio.
- The dividend of DHI is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP13.8%
EPS Next 2Y7.54%
EPS Next 3Y12.1%
DR HORTON INC / DHI FAQ
What is the fundamental rating for DHI stock?
ChartMill assigns a fundamental rating of 6 / 10 to DHI.
Can you provide the valuation status for DR HORTON INC?
ChartMill assigns a valuation rating of 5 / 10 to DR HORTON INC (DHI). This can be considered as Fairly Valued.
Can you provide the profitability details for DR HORTON INC?
DR HORTON INC (DHI) has a profitability rating of 7 / 10.
What is the valuation of DR HORTON INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for DR HORTON INC (DHI) is 13.67 and the Price/Book (PB) ratio is 1.82.
What is the earnings growth outlook for DR HORTON INC?
The Earnings per Share (EPS) of DR HORTON INC (DHI) is expected to decline by -1.14% in the next year.