MERITAGE HOMES CORP (MTH) Stock Fundamental Analysis
NYSE:MTH - New York Stock Exchange, Inc. - US59001A1025 - Common Stock - Currency: USD
Taking everything into account, MTH scores 6 out of 10 in our fundamental rating. MTH was compared to 67 industry peers in the Household Durables industry. While MTH has a great profitability rating, there are some minor concerns on its financial health. MTH has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year MTH was profitable.
MTH had a negative operating cash flow in the past year.
MTH had positive earnings in each of the past 5 years.
In multiple years MTH reported negative operating cash flow during the last 5 years.
1.2 Ratios
MTH has a Return On Assets of 10.98%. This is amongst the best in the industry. MTH outperforms 81.54% of its industry peers.
The Return On Equity of MTH (15.29%) is better than 69.23% of its industry peers.
MTH has a better Return On Invested Capital (12.12%) than 69.23% of its industry peers.
MTH had an Average Return On Invested Capital over the past 3 years of 15.00%. This is above the industry average of 12.03%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.98% | ||
| ROE | 15.29% | ||
| ROIC | 12.12% |
ROA(3y)13.26%
ROA(5y)13.22%
ROE(3y)18.81%
ROE(5y)19.74%
ROIC(3y)15%
ROIC(5y)15.05%
1.3 Margins
With an excellent Profit Margin value of 12.29%, MTH belongs to the best of the industry, outperforming 86.15% of the companies in the same industry.
In the last couple of years the Profit Margin of MTH has grown nicely.
The Operating Margin of MTH (15.72%) is better than 84.62% of its industry peers.
In the last couple of years the Operating Margin of MTH has grown nicely.
With a Gross Margin value of 18.63%, MTH is not doing good in the industry: 81.54% of the companies in the same industry are doing better.
MTH's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.72% | ||
| PM (TTM) | 12.29% | ||
| GM | 18.63% |
OM growth 3Y-5.8%
OM growth 5Y13.51%
PM growth 3Y-5.01%
PM growth 5Y12.54%
GM growth 3Y-5.75%
GM growth 5Y9.07%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), MTH is creating some value.
Compared to 1 year ago, MTH has less shares outstanding
MTH has more shares outstanding than it did 5 years ago.
MTH has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 4.91 indicates that MTH is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 4.91, MTH is doing good in the industry, outperforming 76.92% of the companies in the same industry.
MTH has a Debt/Equity ratio of 0.26. This is a healthy value indicating a solid balance between debt and equity.
MTH has a Debt to Equity ratio of 0.26. This is comparable to the rest of the industry: MTH outperforms 50.77% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 4.91 |
ROIC/WACC1.35
WACC8.99%
2.3 Liquidity
MTH has a Current Ratio of 9.69. This indicates that MTH is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 9.69, MTH belongs to the top of the industry, outperforming 92.31% of the companies in the same industry.
A Quick Ratio of 1.32 indicates that MTH should not have too much problems paying its short term obligations.
MTH has a Quick ratio of 1.32. This is in the better half of the industry: MTH outperforms 69.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 9.69 | ||
| Quick Ratio | 1.32 |
3. Growth
3.1 Past
The earnings per share for MTH have decreased strongly by -46.26% in the last year.
Measured over the past years, MTH shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.45% on average per year.
Looking at the last year, MTH shows a small growth in Revenue. The Revenue has grown by 4.18% in the last year.
MTH shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.77% yearly.
EPS 1Y (TTM)-46.26%
EPS 3Y-17.81%
EPS 5Y10.45%
EPS Q2Q%-56.13%
Revenue 1Y (TTM)4.18%
Revenue growth 3Y7.54%
Revenue growth 5Y11.77%
Sales Q2Q%-2.33%
3.2 Future
MTH is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 4.12% yearly.
MTH is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.34% yearly.
EPS Next Y-9.26%
EPS Next 2Y1.38%
EPS Next 3Y4.12%
EPS Next 5YN/A
Revenue Next Year6.94%
Revenue Next 2Y7.37%
Revenue Next 3Y6.34%
Revenue Next 5YN/A
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
With a Price/Earnings ratio of 6.93, the valuation of MTH can be described as very cheap.
Based on the Price/Earnings ratio, MTH is valued cheaply inside the industry as 87.69% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 30.30, MTH is valued rather cheaply.
MTH is valuated cheaply with a Price/Forward Earnings ratio of 7.63.
78.46% of the companies in the same industry are more expensive than MTH, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.06. MTH is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.93 | ||
| Fwd PE | 7.63 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, MTH is valued cheaper than 81.54% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 5.84 |
4.3 Compensation for Growth
The decent profitability rating of MTH may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.66
EPS Next 2Y1.38%
EPS Next 3Y4.12%
5. Dividend
5.1 Amount
MTH has a Yearly Dividend Yield of 2.04%.
Compared to an average industry Dividend Yield of 3.05, MTH pays a better dividend. On top of this MTH pays more dividend than 83.08% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.29, MTH has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.04% |
5.2 History
The dividend of MTH is nicely growing with an annual growth rate of 138.85%!
MTH has been paying a dividend for over 5 years, so it has already some track record.
The dividend of MTH decreased recently.
Dividend Growth(5Y)138.85%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
13.81% of the earnings are spent on dividend by MTH. This is a low number and sustainable payout ratio.
The dividend of MTH is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP13.81%
EPS Next 2Y1.38%
EPS Next 3Y4.12%
74.19
+0.94 (+1.28%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners101.39%
Inst Owner Change0.46%
Ins Owners2.02%
Ins Owner Change-1.04%
Market Cap5.34B
Analysts68.75
Price Target104.84 (41.31%)
Short Float %N/A
Short Ratio4.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.04% |
Yearly Dividend1.5
Dividend Growth(5Y)138.85%
DP13.81%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.24%
Min EPS beat(2)-6.04%
Max EPS beat(2)6.52%
EPS beat(4)3
Avg EPS beat(4)15.82%
Min EPS beat(4)-6.04%
Max EPS beat(4)42.18%
EPS beat(8)7
Avg EPS beat(8)19.65%
EPS beat(12)11
Avg EPS beat(12)16.9%
EPS beat(16)15
Avg EPS beat(16)17.81%
Revenue beat(2)2
Avg Revenue beat(2)0.95%
Min Revenue beat(2)0.1%
Max Revenue beat(2)1.8%
Revenue beat(4)4
Avg Revenue beat(4)5.39%
Min Revenue beat(4)0.1%
Max Revenue beat(4)12.95%
Revenue beat(8)8
Avg Revenue beat(8)8.78%
Revenue beat(12)10
Avg Revenue beat(12)5.51%
Revenue beat(16)13
Avg Revenue beat(16)5.24%
PT rev (1m)-51.85%
PT rev (3m)-51.22%
EPS NQ rev (1m)-55.97%
EPS NQ rev (3m)-60.31%
EPS NY rev (1m)-54.95%
EPS NY rev (3m)-55.52%
Revenue NQ rev (1m)-7.68%
Revenue NQ rev (3m)-3.89%
Revenue NY rev (1m)-1.3%
Revenue NY rev (3m)-1.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.93 | ||
| Fwd PE | 7.63 | ||
| P/S | 0.83 | ||
| P/FCF | N/A | ||
| P/OCF | N/A | ||
| P/B | 1.04 | ||
| P/tB | 1.04 | ||
| EV/EBITDA | 5.84 |
EPS(TTM)10.71
EY14.44%
EPS(NY)9.72
Fwd EY13.1%
FCF(TTM)-3.56
FCFYN/A
OCF(TTM)-3.16
OCFYN/A
SpS88.92
BVpS71.49
TBVpS71.49
PEG (NY)N/A
PEG (5Y)0.66
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.98% | ||
| ROE | 15.29% | ||
| ROCE | 15.52% | ||
| ROIC | 12.12% | ||
| ROICexc | 13.48% | ||
| ROICexgc | 13.94% | ||
| OM | 15.72% | ||
| PM (TTM) | 12.29% | ||
| GM | 18.63% | ||
| FCFM | N/A |
ROA(3y)13.26%
ROA(5y)13.22%
ROE(3y)18.81%
ROE(5y)19.74%
ROIC(3y)15%
ROIC(5y)15.05%
ROICexc(3y)17.65%
ROICexc(5y)17.95%
ROICexgc(3y)18.18%
ROICexgc(5y)18.5%
ROCE(3y)19.2%
ROCE(5y)19.27%
ROICexcg growth 3Y-13.88%
ROICexcg growth 5Y8.88%
ROICexc growth 3Y-13.77%
ROICexc growth 5Y8.56%
OM growth 3Y-5.8%
OM growth 5Y13.51%
PM growth 3Y-5.01%
PM growth 5Y12.54%
GM growth 3Y-5.75%
GM growth 5Y9.07%
F-Score4
Asset Turnover0.89
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.26 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.3 | ||
| Cap/Depr | 110.4% | ||
| Cap/Sales | 0.45% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 9.69 | ||
| Quick Ratio | 1.32 | ||
| Altman-Z | 4.91 |
F-Score4
WACC8.99%
ROIC/WACC1.35
Cap/Depr(3y)123.49%
Cap/Depr(5y)106.51%
Cap/Sales(3y)0.5%
Cap/Sales(5y)0.49%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-46.26%
EPS 3Y-17.81%
EPS 5Y10.45%
EPS Q2Q%-56.13%
EPS Next Y-9.26%
EPS Next 2Y1.38%
EPS Next 3Y4.12%
EPS Next 5YN/A
Revenue 1Y (TTM)4.18%
Revenue growth 3Y7.54%
Revenue growth 5Y11.77%
Sales Q2Q%-2.33%
Revenue Next Year6.94%
Revenue Next 2Y7.37%
Revenue Next 3Y6.34%
Revenue Next 5YN/A
EBIT growth 1Y5.76%
EBIT growth 3Y1.3%
EBIT growth 5Y26.86%
EBIT Next Year15.75%
EBIT Next 3Y10.79%
EBIT Next 5YN/A
FCF growth 1Y-180.73%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-164%
OCF growth 3YN/A
OCF growth 5YN/A