DR HORTON INC (DHI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DHI - US23331A1097 - Common Stock
151.03 USD
+2.44 (+1.64%)
Overall DHI gets a fundamental rating of 6 out of 10. We evaluated DHI against 60 industry peers in the Household Durables industry. DHI scores excellent points on both the profitability and health parts. This is a solid base for a good stock. 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.
- DHI had positive earnings in each of the past 5 years.
- DHI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of DHI (9.63%) is better than 83.33% of its industry peers.
- DHI has a Return On Equity of 13.90%. This is in the better half of the industry: DHI outperforms 66.67% of its industry peers.
- DHI's Return On Invested Capital of 11.56% is fine compared to the rest of the industry. DHI outperforms 75.00% 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 9.70%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.63% | ||
| ROE | 13.9% | ||
| ROIC | 11.56% |
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
- DHI has a Profit Margin of 9.95%. This is amongst the best in the industry. DHI outperforms 83.33% of its industry peers.
- DHI's Profit Margin has declined in the last couple of years.
- DHI's Operating Margin of 13.57% 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.
- DHI's Gross Margin of 23.61% is on the low side compared to the rest of the industry. DHI is outperformed by 60.00% of its industry peers.
- 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 | 13.57% | ||
| PM (TTM) | 9.95% | ||
| GM | 23.61% |
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
- DHI has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- Compared to 1 year ago, DHI has less shares outstanding
- The number of shares outstanding for DHI has been reduced compared to 5 years ago.
- Compared to 1 year ago, DHI has a worse debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 5.92 indicates that DHI is not in any danger for bankruptcy at the moment.
- DHI's Altman-Z score of 5.92 is amongst the best of the industry. DHI outperforms 85.00% of its industry peers.
- DHI has a debt to FCF ratio of 1.60. This is a very positive value and a sign of high solvency as it would only need 1.60 years to pay back of all of its debts.
- DHI's Debt to FCF ratio of 1.60 is fine compared to the rest of the industry. DHI outperforms 71.67% of its industry peers.
- A Debt/Equity ratio of 0.22 indicates that DHI is not too dependend on debt financing.
- Looking at the Debt to Equity ratio, with a value of 0.22, DHI is in the better half of the industry, outperforming 63.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.22 | ||
| Debt/FCF | 1.6 | ||
| Altman-Z | 5.92 |
ROIC/WACC1.28
WACC9.05%
2.3 Liquidity
- DHI has a Current Ratio of 5.29. This indicates that DHI is financially healthy and has no problem in meeting its short term obligations.
- DHI's Current ratio of 5.29 is fine compared to the rest of the industry. DHI outperforms 75.00% of its industry peers.
- DHI has a Quick Ratio of 5.29. This is a bad value and indicates that DHI is not financially healthy enough and could expect problems in meeting its short term obligations.
- The Quick ratio of DHI (0.55) is worse than 71.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.29 | ||
| Quick Ratio | 0.55 |
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.
- DHI shows a decrease in Revenue. In the last year, the revenue decreased by -8.62%.
- Measured over the past years, DHI shows a quite strong growth in Revenue. The Revenue has been growing by 11.02% on average per year.
EPS 1Y (TTM)-22.19%
EPS 3Y-11.18%
EPS 5Y12.86%
EPS Q2Q%-22.22%
Revenue 1Y (TTM)-8.62%
Revenue growth 3Y0.76%
Revenue growth 5Y11.02%
Sales Q2Q%-9.54%
3.2 Future
- Based on estimates for the next years, DHI will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.04% on average per year.
- DHI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.20% yearly.
EPS Next Y-1.14%
EPS Next 2Y7.54%
EPS Next 3Y12.1%
EPS Next 5Y19.04%
Revenue Next Year-0.68%
Revenue Next 2Y2.36%
Revenue Next 3Y4.61%
Revenue Next 5Y7.2%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better 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
- DHI is valuated correctly with a Price/Earnings ratio of 13.72.
- Compared to the rest of the industry, the Price/Earnings ratio of DHI is on the same level as its industry peers.
- When comparing the Price/Earnings ratio of DHI to the average of the S&P500 Index (28.82), we can say DHI is valued rather cheaply.
- Based on the Price/Forward Earnings ratio of 11.27, the valuation of DHI can be described as reasonable.
- 73.33% of the companies in the same industry are more expensive than DHI, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of DHI to the average of the S&P500 Index (25.95), we can say DHI is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.72 | ||
| Fwd PE | 11.27 |
4.2 Price Multiples
- DHI's Enterprise Value to EBITDA is on the same level as the industry average.
- Based on the Price/Free Cash Flow ratio, DHI is valued a bit cheaper than 71.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.69 | ||
| EV/EBITDA | 9.8 |
4.3 Compensation for Growth
- The decent profitability rating of DHI may justify a higher PE ratio.
- A more expensive valuation may be justified as DHI's earnings are expected to grow with 12.10% in the coming years.
PEG (NY)N/A
PEG (5Y)1.07
EPS Next 2Y7.54%
EPS Next 3Y12.1%
5. Dividend
5.1 Amount
- DHI has a Yearly Dividend Yield of 1.20%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 1.17, DHI pays a bit more dividend than its industry peers.
- DHI's Dividend Yield is slightly below the S&P500 average, which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.2% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)18%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
- 14.93% of the earnings are spent on dividend by DHI. This is a low number and sustainable payout ratio.
- DHI's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP14.93%
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 13.72 and the Price/Book (PB) ratio is 1.84.
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.