DR HORTON INC (DHI) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:DHI - US23331A1097 - Common Stock
149.72 USD
-0.45 (-0.3%)
Overall DHI gets a fundamental rating of 6 out of 10. We evaluated DHI against 60 industry peers in the Household Durables industry. DHI has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. DHI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year DHI was profitable.
- DHI had a positive operating cash flow in the past year.
- In the past 5 years DHI has always been profitable.
- Each year in the past 5 years DHI had a positive operating cash flow.
1.2 Ratios
- With an excellent Return On Assets value of 9.63%, DHI belongs to the best of the industry, outperforming 83.33% of the companies in the same industry.
- With a decent Return On Equity value of 13.90%, DHI is doing good in the industry, outperforming 66.67% of the companies in the same industry.
- Looking at the Return On Invested Capital, with a value of 11.56%, DHI is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
- DHI had an Average Return On Invested Capital over the past 3 years of 14.99%. This 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.
- Looking at the Operating Margin, with a value of 13.57%, DHI belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
- In the last couple of years the Operating Margin of DHI has remained more or less at the same level.
- With a Gross Margin value of 23.61%, DHI is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
- 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
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), DHI is creating some value.
- DHI has less shares outstanding than it did 1 year ago.
- The number of shares outstanding for DHI has been reduced compared to 5 years ago.
- The debt/assets ratio for DHI is higher compared to a year ago.
2.2 Solvency
- DHI has an Altman-Z score of 5.95. This indicates that DHI is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 5.95, DHI belongs to the top of the industry, outperforming 85.00% of the companies in the same industry.
- 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 has a better Debt to FCF ratio (1.60) than 71.67% of its industry peers.
- DHI has a Debt/Equity ratio of 0.22. This is a healthy value indicating a solid balance between debt and equity.
- 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 | 5.95 |
ROIC/WACC1.27
WACC9.07%
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.
- With a decent Current ratio value of 5.29, DHI is doing good in the industry, outperforming 75.00% of the companies in the same industry.
- 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.
- With a Quick ratio value of 0.55, DHI is not doing good in the industry: 71.67% of the companies in the same industry are doing better.
| 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%.
- DHI shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.02% yearly.
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.
- 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-0.68%
Revenue Next 2Y2.36%
Revenue Next 3Y4.61%
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.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 13.60, DHI is valued correctly.
- DHI's Price/Earnings ratio is in line with the industry average.
- When comparing the Price/Earnings ratio of DHI to the average of the S&P500 Index (28.60), we can say DHI is valued rather cheaply.
- With a Price/Forward Earnings ratio of 11.17, the valuation of DHI can be described as very reasonable.
- 71.67% of the companies in the same industry are more expensive than DHI, based on the Price/Forward Earnings ratio.
- DHI is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.6 | ||
| Fwd PE | 11.17 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as DHI.
- DHI's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DHI is cheaper than 71.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.58 | ||
| EV/EBITDA | 9.9 |
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 1.21%. 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 1.17.
- Compared to the average S&P500 Dividend Yield of 1.82, DHI is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.21% |
5.2 History
- On average, the dividend of DHI grows each year by 18.00%, which is quite nice.
- 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
- 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 13.6 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.