MERITAGE HOMES CORP (MTH)
US59001A1025 - Common Stock
Taking everything into account, MTH scores 6 out of 10 in our fundamental rating. MTH was compared to 66 industry peers in the Household Durables industry. MTH has an excellent profitability rating, but there are some minor concerns on its financial health. MTH may be a bit undervalued, certainly considering the very reasonable score on growth This makes MTH very considerable for value investing!
1. Profitability
1.1 Basic Checks
In the past year MTH was profitable.
MTH had a negative operating cash flow in the past year.
Each year in the past 5 years MTH has been profitable.
Of the past 5 years MTH 4 years had a positive operating cash flow.
1.2 Ratios
MTH's Return On Assets of 11.44% is amongst the best of the industry. MTH outperforms 84.38% of its industry peers.
MTH has a Return On Equity of 16.15%. This is in the better half of the industry: MTH outperforms 68.75% of its industry peers.
Looking at the Return On Invested Capital, with a value of 12.73%, MTH is in the better half of the industry, outperforming 73.44% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for MTH is above the industry average of 12.02%.
The 3 year average ROIC (16.78%) for MTH is well above the current ROIC(12.73%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.44% | ||
| ROE | 16.15% | ||
| ROIC | 12.73% |
ROA(3y)14.72%
ROA(5y)12.49%
ROE(3y)21.79%
ROE(5y)19.21%
ROIC(3y)16.78%
ROIC(5y)14.09%
1.3 Margins
MTH has a Profit Margin of 12.63%. This is amongst the best in the industry. MTH outperforms 87.50% of its industry peers.
MTH's Profit Margin has improved in the last couple of years.
MTH has a better Operating Margin (16.22%) than 85.94% of its industry peers.
MTH's Operating Margin has improved in the last couple of years.
The Gross Margin of MTH (19.14%) is worse than 79.69% of its industry peers.
MTH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.22% | ||
| PM (TTM) | 12.63% | ||
| GM | 19.14% |
OM growth 3Y9.53%
OM growth 5Y15.32%
PM growth 3Y8.55%
PM growth 5Y13.32%
GM growth 3Y6.8%
GM growth 5Y10.5%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so MTH is creating value.
The number of shares outstanding for MTH has been reduced compared to 1 year ago.
MTH has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, MTH has an improved debt to assets ratio.
2.2 Solvency
MTH has an Altman-Z score of 4.13. This indicates that MTH is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 4.13, MTH is in the better half of the industry, outperforming 64.06% of the companies in the same industry.
A Debt/Equity ratio of 0.26 indicates that MTH is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.26, MTH is in line with its industry, outperforming 54.69% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 4.13 |
ROIC/WACC1.49
WACC8.52%
2.3 Liquidity
MTH has a Current Ratio of 8.81. This indicates that MTH is financially healthy and has no problem in meeting its short term obligations.
MTH has a Current ratio of 8.81. This is amongst the best in the industry. MTH outperforms 92.19% of its industry peers.
A Quick Ratio of 1.63 indicates that MTH should not have too much problems paying its short term obligations.
MTH's Quick ratio of 1.63 is fine compared to the rest of the industry. MTH outperforms 76.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 8.81 | ||
| Quick Ratio | 1.63 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 2.03% over the past year.
Measured over the past years, MTH shows a very strong growth in Earnings Per Share. The EPS has been growing by 28.78% on average per year.
Looking at the last year, MTH shows a decrease in Revenue. The Revenue has decreased by -0.66% in the last year.
MTH shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.71% yearly.
EPS 1Y (TTM)2.03%
EPS 3Y21.86%
EPS 5Y28.78%
EPS Q2Q%-11%
Revenue 1Y (TTM)-0.66%
Revenue growth 3Y10.89%
Revenue growth 5Y11.71%
Sales Q2Q%-1.03%
3.2 Future
Based on estimates for the next years, MTH will show a small growth in Earnings Per Share. The EPS will grow by 6.12% on average per year.
MTH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.41% yearly.
EPS Next Y7.68%
EPS Next 2Y4.03%
EPS Next 3Y6.12%
EPS Next 5YN/A
Revenue Next Year5.73%
Revenue Next 2Y7.03%
Revenue Next 3Y7.41%
Revenue Next 5YN/A
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
With a Price/Earnings ratio of 3.44, the valuation of MTH can be described as very cheap.
98.44% of the companies in the same industry are more expensive than MTH, based on the Price/Earnings ratio.
MTH is valuated cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 3.52, the valuation of MTH can be described as very cheap.
Compared to the rest of the industry, the Price/Forward Earnings ratio of MTH indicates a rather cheap valuation: MTH is cheaper than 98.44% of the companies listed in the same industry.
MTH's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 23.54.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 3.44 | ||
| Fwd PE | 3.52 |
4.2 Price Multiples
98.44% of the companies in the same industry are more expensive than MTH, based on the Enterprise Value to EBITDA ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 2.97 |
4.3 Compensation for Growth
MTH's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
MTH has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)0.45
PEG (5Y)0.12
EPS Next 2Y4.03%
EPS Next 3Y6.12%
5. Dividend
5.1 Amount
MTH has a Yearly Dividend Yield of 1.97%. Purely for dividend investing, there may be better candidates out there.
In the last 3 months the price of MTH has falen by -23.12%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
Compared to an average industry Dividend Yield of 2.99, MTH pays a better dividend. On top of this MTH pays more dividend than 81.25% of the companies listed in the same industry.
MTH's Dividend Yield is comparable with the S&P500 average which is at 2.33.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.97% |
5.2 History
On average, the dividend of MTH grows each year by 134.10%, which is quite nice.
MTH has been paying a dividend for over 5 years, so it has already some track record.
MTH has decreased its dividend recently.
Dividend Growth(5Y)134.1%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
MTH pays out 11.26% of its income as dividend. This is a sustainable payout ratio.
The dividend of MTH is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP11.26%
EPS Next 2Y4.03%
EPS Next 3Y6.12%
MERITAGE HOMES CORP
NYSE:MTH (1/8/2025, 3:14:50 PM)
75.9
+1.41 (+1.89%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners101.39%
Inst Owner Change-0.01%
Ins Owners2.02%
Ins Owner Change-2.3%
Market Cap2.75B
Analysts70
Price TargetN/A
Short Float %3.2%
Short Ratio2.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.97% |
Dividend Growth(5Y)134.1%
DP11.26%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.58%
Min EPS beat(2)6.52%
Max EPS beat(2)20.63%
EPS beat(4)4
Avg EPS beat(4)18.07%
Min EPS beat(4)2.95%
Max EPS beat(4)42.18%
EPS beat(8)8
Avg EPS beat(8)20.44%
EPS beat(12)12
Avg EPS beat(12)17.62%
EPS beat(16)16
Avg EPS beat(16)19.25%
Revenue beat(2)2
Avg Revenue beat(2)3.41%
Min Revenue beat(2)0.1%
Max Revenue beat(2)6.73%
Revenue beat(4)4
Avg Revenue beat(4)6.76%
Min Revenue beat(4)0.1%
Max Revenue beat(4)12.95%
Revenue beat(8)8
Avg Revenue beat(8)8.58%
Revenue beat(12)9
Avg Revenue beat(12)5.27%
Revenue beat(16)13
Avg Revenue beat(16)5.56%
PT rev (1m)0.47%
PT rev (3m)3.66%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.57%
EPS NY rev (1m)0.08%
EPS NY rev (3m)1%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.53%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)0.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 3.44 | ||
| Fwd PE | 3.52 | ||
| P/S | 0.43 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 0.55 | ||
| P/tB | 0.55 | ||
| EV/EBITDA | 2.97 |
EPS(TTM)22.09
EY29.1%
EPS(NY)21.58
Fwd EY28.43%
FCF(TTM)-7.21
FCFYN/A
OCF(TTM)-6.43
OCFYN/A
SpS177.83
BVpS139.02
TBVpS138.11
PEG (NY)0.45
PEG (5Y)0.12
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.44% | ||
| ROE | 16.15% | ||
| ROCE | 16.44% | ||
| ROIC | 12.73% | ||
| ROICexc | 14.64% | ||
| ROICexgc | 15.31% | ||
| OM | 16.22% | ||
| PM (TTM) | 12.63% | ||
| GM | 19.14% | ||
| FCFM | N/A |
ROA(3y)14.72%
ROA(5y)12.49%
ROE(3y)21.79%
ROE(5y)19.21%
ROIC(3y)16.78%
ROIC(5y)14.09%
ROICexc(3y)19.97%
ROICexc(5y)16.89%
ROICexgc(3y)20.61%
ROICexgc(5y)17.38%
ROCE(3y)21.68%
ROCE(5y)18.21%
ROICexcg growth 3Y0.28%
ROICexcg growth 5Y15.75%
ROICexc growth 3Y0%
ROICexc growth 5Y15.47%
OM growth 3Y9.53%
OM growth 5Y15.32%
PM growth 3Y8.55%
PM growth 5Y13.32%
GM growth 3Y6.8%
GM growth 5Y10.5%
F-Score4
Asset Turnover0.91
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.23 | ||
| Cap/Depr | 103.96% | ||
| Cap/Sales | 0.44% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 8.81 | ||
| Quick Ratio | 1.63 | ||
| Altman-Z | 4.13 |
F-Score4
WACC8.52%
ROIC/WACC1.49
Cap/Depr(3y)119.39%
Cap/Depr(5y)101.92%
Cap/Sales(3y)0.52%
Cap/Sales(5y)0.53%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)2.03%
EPS 3Y21.86%
EPS 5Y28.78%
EPS Q2Q%-11%
EPS Next Y7.68%
EPS Next 2Y4.03%
EPS Next 3Y6.12%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.66%
Revenue growth 3Y10.89%
Revenue growth 5Y11.71%
Sales Q2Q%-1.03%
Revenue Next Year5.73%
Revenue Next 2Y7.03%
Revenue Next 3Y7.41%
Revenue Next 5YN/A
EBIT growth 1Y0.83%
EBIT growth 3Y21.46%
EBIT growth 5Y28.82%
EBIT Next Year15.66%
EBIT Next 3Y7.69%
EBIT Next 5YN/A
FCF growth 1Y-159.41%
FCF growth 3Y-14.65%
FCF growth 5Y6.76%
OCF growth 1Y-217.68%
OCF growth 3Y-12.48%
OCF growth 5Y6.28%