DR HORTON INC (DHI) Stock Fundamental Analysis
NYSE:DHI - New York Stock Exchange, Inc. - US23331A1097 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to DHI. DHI was compared to 63 industry peers in the Household Durables industry. Both the health and profitability get an excellent rating, making DHI a very profitable company, without any liquidiy or solvency issues. DHI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
DHI had positive earnings in the past year.
DHI had a positive operating cash flow in the past year.
In the past 5 years DHI has always been profitable.
DHI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of DHI (12.03%) is better than 87.30% of its industry peers.
DHI has a better Return On Equity (17.64%) than 77.78% of its industry peers.
DHI's Return On Invested Capital of 14.00% is fine compared to the rest of the industry. DHI outperforms 79.37% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DHI is significantly above the industry average of 10.29%.
The last Return On Invested Capital (14.00%) for DHI is well below the 3 year average (18.65%), which needs to be investigated, but indicates that DHI had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.03% | ||
| ROE | 17.64% | ||
| ROIC | 14% |
ROA(3y)15.68%
ROA(5y)15.4%
ROE(3y)23.3%
ROE(5y)23.6%
ROIC(3y)18.65%
ROIC(5y)18.07%
1.3 Margins
DHI has a better Profit Margin (12.15%) than 90.48% of its industry peers.
DHI's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 16.33%, DHI belongs to the best of the industry, outperforming 88.89% of the companies in the same industry.
In the last couple of years the Operating Margin of DHI has grown nicely.
DHI has a Gross Margin (25.72%) which is comparable to the rest of the industry.
DHI's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.33% | ||
| PM (TTM) | 12.15% | ||
| GM | 25.72% |
OM growth 3Y-3.96%
OM growth 5Y7.21%
PM growth 3Y-4.92%
PM growth 5Y7.03%
GM growth 3Y-2.88%
GM growth 5Y3.16%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so DHI is creating value.
The number of shares outstanding for DHI has been reduced compared to 1 year ago.
DHI has less shares outstanding than it did 5 years ago.
DHI has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 5.61 indicates that DHI is not in any danger for bankruptcy at the moment.
The Altman-Z score of DHI (5.61) is better than 84.13% of its industry peers.
DHI has a debt to FCF ratio of 2.39. This is a good value and a sign of high solvency as DHI would need 2.39 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.39, DHI is doing good in the industry, outperforming 74.60% of the companies in the same industry.
A Debt/Equity ratio of 0.26 indicates that DHI is not too dependend on debt financing.
DHI has a Debt to Equity ratio (0.26) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 2.39 | ||
| Altman-Z | 5.61 |
ROIC/WACC1.63
WACC8.6%
2.3 Liquidity
A Current Ratio of 5.12 indicates that DHI has no problem at all paying its short term obligations.
DHI has a better Current ratio (5.12) than 77.78% of its industry peers.
A Quick Ratio of 0.51 indicates that DHI may have some problems paying its short term obligations.
DHI has a worse Quick ratio (0.51) than 68.25% of its industry peers.
DHI does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 5.12 | ||
| Quick Ratio | 0.51 |
3. Growth
3.1 Past
The earnings per share for DHI have decreased strongly by -10.07% in the last year.
Measured over the past years, DHI shows a very strong growth in Earnings Per Share. The EPS has been growing by 27.63% on average per year.
The Revenue has decreased by -4.71% in the past year.
DHI shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 15.91% yearly.
EPS 1Y (TTM)-10.07%
EPS 3Y7.75%
EPS 5Y27.63%
EPS Q2Q%-26.7%
Revenue 1Y (TTM)-4.71%
Revenue growth 3Y9.84%
Revenue growth 5Y15.91%
Sales Q2Q%-15.08%
3.2 Future
DHI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.99% yearly.
DHI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.46% yearly.
EPS Next Y-19.31%
EPS Next 2Y-6.13%
EPS Next 3Y2.4%
EPS Next 5Y9.99%
Revenue Next Year-8.49%
Revenue Next 2Y-2.82%
Revenue Next 3Y1.08%
Revenue Next 5Y4.46%
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
Based on the Price/Earnings ratio of 9.98, the valuation of DHI can be described as reasonable.
DHI's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 27.50, DHI is valued rather cheaply.
A Price/Forward Earnings ratio of 10.42 indicates a reasonable valuation of DHI.
DHI's Price/Forward Earnings ratio is in line with the industry average.
DHI's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 36.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.98 | ||
| Fwd PE | 10.42 |
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 76.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.84 | ||
| EV/EBITDA | 7.34 |
4.3 Compensation for Growth
DHI has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.36
EPS Next 2Y-6.13%
EPS Next 3Y2.4%
5. Dividend
5.1 Amount
DHI has a Yearly Dividend Yield of 1.15%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.24, DHI pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.35, DHI's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
5.2 History
The dividend of DHI is nicely growing with an annual growth rate of 14.84%!
DHI has been paying a dividend for at least 10 years, so it has a reliable track record.
DHI has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)14.84%
Div Incr Years10
Div Non Decr Years10
5.3 Sustainability
10.49% of the earnings are spent on dividend by DHI. This is a low number and sustainable payout ratio.
DHI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP10.49%
EPS Next 2Y-6.13%
EPS Next 3Y2.4%
131.8
+0.15 (+0.11%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners84.99%
Inst Owner Change0.05%
Ins Owners0.57%
Ins Owner Change2.99%
Market Cap40.49B
Analysts69.23
Price Target155.11 (17.69%)
Short Float %2.81%
Short Ratio2.25
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.15% |
Yearly Dividend1.2
Dividend Growth(5Y)14.84%
DP10.49%
Div Incr Years10
Div Non Decr Years10
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.34%
Min EPS beat(2)-2.98%
Max EPS beat(2)9.66%
EPS beat(4)2
Avg EPS beat(4)2.01%
Min EPS beat(4)-6.87%
Max EPS beat(4)9.66%
EPS beat(8)5
Avg EPS beat(8)8.64%
EPS beat(12)8
Avg EPS beat(12)10.32%
EPS beat(16)12
Avg EPS beat(16)10.76%
Revenue beat(2)1
Avg Revenue beat(2)0.89%
Min Revenue beat(2)-4.66%
Max Revenue beat(2)6.43%
Revenue beat(4)2
Avg Revenue beat(4)0.02%
Min Revenue beat(4)-4.66%
Max Revenue beat(4)6.43%
Revenue beat(8)6
Avg Revenue beat(8)3.57%
Revenue beat(12)8
Avg Revenue beat(12)4.57%
Revenue beat(16)12
Avg Revenue beat(16)4.03%
PT rev (1m)0%
PT rev (3m)-9.96%
EPS NQ rev (1m)-0.62%
EPS NQ rev (3m)-17.55%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)-11.81%
Revenue NQ rev (1m)-0.16%
Revenue NQ rev (3m)-12.08%
Revenue NY rev (1m)-0.07%
Revenue NY rev (3m)-7.2%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.98 | ||
| Fwd PE | 10.42 | ||
| P/S | 1.15 | ||
| P/FCF | 14.84 | ||
| P/OCF | 14.1 | ||
| P/B | 1.66 | ||
| P/tB | 1.68 | ||
| EV/EBITDA | 7.34 |
EPS(TTM)13.21
EY10.02%
EPS(NY)12.65
Fwd EY9.6%
FCF(TTM)8.88
FCFY6.74%
OCF(TTM)9.34
OCFY7.09%
SpS114.97
BVpS79.19
TBVpS78.66
PEG (NY)N/A
PEG (5Y)0.36
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.03% | ||
| ROE | 17.64% | ||
| ROCE | 19.26% | ||
| ROIC | 14% | ||
| ROICexc | 15.2% | ||
| ROICexgc | 16.95% | ||
| OM | 16.33% | ||
| PM (TTM) | 12.15% | ||
| GM | 25.72% | ||
| FCFM | 7.73% |
ROA(3y)15.68%
ROA(5y)15.4%
ROE(3y)23.3%
ROE(5y)23.6%
ROIC(3y)18.65%
ROIC(5y)18.07%
ROICexc(3y)21.3%
ROICexc(5y)21.07%
ROICexgc(3y)23.91%
ROICexgc(5y)23.3%
ROCE(3y)25.99%
ROCE(5y)25.32%
ROICexcg growth 3Y-8.14%
ROICexcg growth 5Y5.96%
ROICexc growth 3Y-9.18%
ROICexc growth 5Y5.08%
OM growth 3Y-3.96%
OM growth 5Y7.21%
PM growth 3Y-4.92%
PM growth 5Y7.03%
GM growth 3Y-2.88%
GM growth 5Y3.16%
F-Score4
Asset Turnover0.99
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 2.39 | ||
| Debt/EBITDA | 1.09 | ||
| Cap/Depr | 149.53% | ||
| Cap/Sales | 0.4% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 48.96% | ||
| Profit Quality | 63.57% | ||
| Current Ratio | 5.12 | ||
| Quick Ratio | 0.51 | ||
| Altman-Z | 5.61 |
F-Score4
WACC8.6%
ROIC/WACC1.63
Cap/Depr(3y)178.02%
Cap/Depr(5y)250.53%
Cap/Sales(3y)0.44%
Cap/Sales(5y)0.74%
Profit Quality(3y)45.73%
Profit Quality(5y)38.28%
High Growth Momentum
Growth
EPS 1Y (TTM)-10.07%
EPS 3Y7.75%
EPS 5Y27.63%
EPS Q2Q%-26.7%
EPS Next Y-19.31%
EPS Next 2Y-6.13%
EPS Next 3Y2.4%
EPS Next 5Y9.99%
Revenue 1Y (TTM)-4.71%
Revenue growth 3Y9.84%
Revenue growth 5Y15.91%
Sales Q2Q%-15.08%
Revenue Next Year-8.49%
Revenue Next 2Y-2.82%
Revenue Next 3Y1.08%
Revenue Next 5Y4.46%
EBIT growth 1Y-13.91%
EBIT growth 3Y5.48%
EBIT growth 5Y24.26%
EBIT Next Year-24.69%
EBIT Next 3Y-2.94%
EBIT Next 5Y3.36%
FCF growth 1Y0.5%
FCF growth 3Y96.46%
FCF growth 5Y24.83%
OCF growth 1Y0.01%
OCF growth 3Y60.02%
OCF growth 5Y19.67%