DR HORTON INC (DHI) Stock Fundamental Analysis
NYSE:DHI - New York Stock Exchange, Inc. - US23331A1097 - Common Stock - Currency: USD
Overall DHI gets a fundamental rating of 7 out of 10. We evaluated DHI against 63 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
In the past year DHI was profitable.
DHI had a positive operating cash flow in the past year.
Each year in the past 5 years DHI has been profitable.
Each year in the past 5 years DHI had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 12.03%, DHI belongs to the top of the industry, outperforming 87.30% of the companies in the same industry.
With a decent Return On Equity value of 17.64%, DHI is doing good in the industry, outperforming 77.78% of the companies in the same industry.
DHI has a Return On Invested Capital of 14.00%. This is in the better half 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 10.55%.
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 Profit Margin of 12.15%. This is amongst the best in the industry. DHI outperforms 90.48% of its industry peers.
DHI's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 16.33%, DHI belongs to the top of the industry, outperforming 88.89% of the companies in the same industry.
DHI's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 25.72%, DHI perfoms like the industry average, outperforming 47.62% of the companies in the same industry.
In the last couple of years the Gross Margin of DHI has grown nicely.
| 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.
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.
Compared to 1 year ago, DHI has a worse debt to assets ratio.
2.2 Solvency
DHI has an Altman-Z score of 5.59. This indicates that DHI is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of DHI (5.59) 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.
DHI's Debt to FCF ratio of 2.39 is fine compared to the rest of the industry. DHI outperforms 71.43% of its industry peers.
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 in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | 2.39 | ||
| Altman-Z | 5.59 |
ROIC/WACC1.65
WACC8.5%
2.3 Liquidity
DHI has a Current Ratio of 5.12. This indicates that DHI is financially healthy and has no problem in meeting its short term obligations.
DHI's Current ratio of 5.12 is fine compared to the rest of the industry. DHI outperforms 77.78% of its industry peers.
A Quick Ratio of 0.51 indicates that DHI may have some problems paying its short term obligations.
With a Quick ratio value of 0.51, DHI is not doing good in the industry: 68.25% of the companies in the same industry are doing better.
The current and quick ratio evaluation for DHI is rather negative, while it does have 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.
DHI shows a decrease in Revenue. In the last year, the revenue decreased by -4.71%.
The Revenue has been growing by 15.91% on average over the past years. This is quite good.
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
Based on estimates for the next years, DHI will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.99% on average per year.
The Revenue is expected to grow by 4.46% on average over the next years.
EPS Next Y-19.31%
EPS Next 2Y-6.01%
EPS Next 3Y2.54%
EPS Next 5Y9.99%
Revenue Next Year-8.47%
Revenue Next 2Y-2.64%
Revenue Next 3Y1.18%
Revenue Next 5Y4.46%
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 decreasing.
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
Based on the Price/Earnings ratio of 9.91, the valuation of DHI can be described as reasonable.
Compared to the rest of the industry, the Price/Earnings ratio of DHI indicates a somewhat cheap valuation: DHI is cheaper than 60.32% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of DHI to the average of the S&P500 Index (27.29), we can say DHI is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 10.32, the valuation of DHI can be described as reasonable.
The rest of the industry has a similar Price/Forward Earnings ratio as DHI.
When comparing the Price/Forward Earnings ratio of DHI to the average of the S&P500 Index (21.74), we can say DHI is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.91 | ||
| Fwd PE | 10.32 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DHI is valued a bit cheaper than 61.90% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, DHI is valued a bit cheaper than 74.60% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.74 | ||
| EV/EBITDA | 7.31 |
4.3 Compensation for Growth
The excellent profitability rating of DHI may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.36
EPS Next 2Y-6.01%
EPS Next 3Y2.54%
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 3.27.
With a Dividend Yield of 1.21, DHI pays less dividend than the S&P500 average, which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.21% |
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-6.01%
EPS Next 3Y2.54%
130.97
-0.93 (-0.71%)
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 Cap40.23B
Analysts69.23
Price Target155.11 (18.43%)
Short Float %2.71%
Short Ratio2.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.21% |
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)-0.13%
PT rev (3m)-9.96%
EPS NQ rev (1m)-0.62%
EPS NQ rev (3m)-20.14%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)-11.81%
Revenue NQ rev (1m)-0.16%
Revenue NQ rev (3m)-13.72%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)-7.96%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.91 | ||
| Fwd PE | 10.32 | ||
| P/S | 1.14 | ||
| P/FCF | 14.74 | ||
| P/OCF | 14.02 | ||
| P/B | 1.65 | ||
| P/tB | 1.66 | ||
| EV/EBITDA | 7.31 |
EPS(TTM)13.21
EY10.09%
EPS(NY)12.68
Fwd EY9.69%
FCF(TTM)8.88
FCFY6.78%
OCF(TTM)9.34
OCFY7.13%
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 | 5.59 |
F-Score4
WACC8.5%
ROIC/WACC1.65
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-6.01%
EPS Next 3Y2.54%
EPS Next 5Y9.99%
Revenue 1Y (TTM)-4.71%
Revenue growth 3Y9.84%
Revenue growth 5Y15.91%
Sales Q2Q%-15.08%
Revenue Next Year-8.47%
Revenue Next 2Y-2.64%
Revenue Next 3Y1.18%
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%