Overall TOL gets a fundamental rating of 7 out of 10. We evaluated TOL against 60 industry peers in the Household Durables industry. TOL scores excellent on profitability, but there are some minor concerns on its financial health. TOL is not valued too expensively and it also shows a decent growth rate.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

TOL had positive earnings in the past year.
TOL had a positive operating cash flow in the past year.
In the past 5 years TOL has always been profitable.
In the past 5 years TOL always reported a positive cash flow from operatings.

1.2 Ratios

The Return On Assets of TOL (9.27%) is better than 81.67% of its industry peers.
The Return On Equity of TOL (16.28%) is better than 73.33% of its industry peers.
The Return On Invested Capital of TOL (11.64%) is better than 78.33% of its industry peers.
TOL had an Average Return On Invested Capital over the past 3 years of 13.18%. This is above the industry average of 9.70%.

		Industry Rank	Sector Rank
ROA	9.27%
ROE	16.28%
ROIC	11.64%

ROA(3y)10.66%

ROA(5y)9.94%

ROE(3y)18.98%

ROE(5y)18.83%

ROIC(3y)13.18%

ROIC(5y)12.04%

1.3 Margins

TOL's Profit Margin of 12.28% is amongst the best of the industry. TOL outperforms 91.67% of its industry peers.
TOL's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 15.93%, TOL belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
TOL's Operating Margin has improved in the last couple of years.
TOL's Gross Margin of 25.36% is in line compared to the rest of the industry. TOL outperforms 51.67% of its industry peers.
In the last couple of years the Gross Margin of TOL has grown nicely.

		Industry Rank	Sector Rank
OM	15.93%
PM (TTM)	12.28%
GM	25.36%

OM growth 3Y2.76%

OM growth 5Y15.45%

PM growth 3Y-0.66%

PM growth 5Y14.22%

GM growth 3Y1.58%

GM growth 5Y4.83%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so TOL is still creating some value.
Compared to 1 year ago, TOL has less shares outstanding
The number of shares outstanding for TOL has been reduced compared to 5 years ago.
The debt/assets ratio for TOL has been reduced compared to a year ago.

2.2 Solvency

TOL has an Altman-Z score of 4.09. This indicates that TOL is financially healthy and has little risk of bankruptcy at the moment.
TOL has a better Altman-Z score (4.09) than 68.33% of its industry peers.
TOL has a debt to FCF ratio of 2.72. This is a good value and a sign of high solvency as TOL would need 2.72 years to pay back of all of its debts.
TOL has a better Debt to FCF ratio (2.72) than 66.67% of its industry peers.
TOL has a Debt/Equity ratio of 0.34. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.34, TOL is in line with its industry, outperforming 50.00% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.34
Debt/FCF	2.72
Altman-Z	4.09

ROIC/WACC1.29

WACC9%

2.3 Liquidity

TOL has a Current Ratio of 3.90. This indicates that TOL is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 3.90, TOL is doing good in the industry, outperforming 68.33% of the companies in the same industry.
TOL has a Quick Ratio of 3.90. This is a bad value and indicates that TOL is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.45, TOL is doing worse than 83.33% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	3.9
Quick Ratio	0.45

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

TOL shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.16%.
TOL shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 31.49% yearly.
The Revenue has been growing slightly by 1.11% in the past year.
The Revenue has been growing by 9.15% on average over the past years. This is quite good.

EPS 1Y (TTM)-2.16%

EPS 3Y10.17%

EPS 5Y31.49%

EPS Q2Q%-1.08%

Revenue 1Y (TTM)1.11%

Revenue growth 3Y2.19%

Revenue growth 5Y9.15%

Sales Q2Q%5.01%

3.2 Future

Based on estimates for the next years, TOL will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.92% on average per year.
The Revenue is expected to grow by 8.01% on average over the next years. This is quite good.

EPS Next Y-4.38%

EPS Next 2Y3.31%

EPS Next 3Y6.02%

EPS Next 5Y11.92%

Revenue Next Year-3.5%

Revenue Next 2Y2.02%

Revenue Next 3Y3.22%

Revenue Next 5Y8.01%

3.3 Evolution

The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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 stable.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 10.85, which indicates a very decent valuation of TOL.
Based on the Price/Earnings ratio, TOL is valued a bit cheaper than the industry average as 68.33% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of TOL to the average of the S&P500 Index (28.39), we can say TOL is valued rather cheaply.
With a Price/Forward Earnings ratio of 11.34, the valuation of TOL can be described as very reasonable.
TOL's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TOL is cheaper than 73.33% of the companies in the same industry.
TOL's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.72.

		Industry Rank	Sector Rank
PE	10.85
Fwd PE	11.34

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TOL is on the same level as its industry peers.
68.33% of the companies in the same industry are more expensive than TOL, based on the Price/Free Cash Flow ratio.

		Industry Rank	Sector Rank
P/FCF	13.81
EV/EBITDA	8.47

4.3 Compensation for Growth

TOL has an outstanding profitability rating, which may justify a higher PE ratio.

PEG (NY)N/A

PEG (5Y)0.34

EPS Next 2Y3.31%

EPS Next 3Y6.02%

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5. Dividend

5.1 Amount

With a yearly dividend of 0.68%, TOL is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.18, TOL pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.68, TOL pays less dividend than the S&P500 average, which is at 1.82.

		Industry Rank	Sector Rank
Dividend Yield	0.68%

5.2 History

The dividend of TOL is nicely growing with an annual growth rate of 18.76%!
TOL has paid a dividend for at least 10 years, which is a reliable track record.
As TOL did not decrease their dividend in the past 5 years, we can say the dividend looks stable.

Dividend Growth(5Y)18.76%

Div Incr Years4

Div Non Decr Years7

5.3 Sustainability

7.21% of the earnings are spent on dividend by TOL. This is a low number and sustainable payout ratio.
The dividend of TOL is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.

DP7.21%

EPS Next 2Y3.31%

EPS Next 3Y6.02%

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TOLL BROTHERS INC / TOL FAQ

What is the ChartMill fundamental rating of TOLL BROTHERS INC (TOL) stock?

ChartMill assigns a fundamental rating of 7 / 10 to TOL.

Can you provide the valuation status for TOLL BROTHERS INC?

ChartMill assigns a valuation rating of 6 / 10 to TOLL BROTHERS INC (TOL). This can be considered as Fairly Valued.

How profitable is TOLL BROTHERS INC (TOL) stock?

TOLL BROTHERS INC (TOL) has a profitability rating of 8 / 10.

Can you provide the PE and PB ratios for TOL stock?

The Price/Earnings (PE) ratio for TOLL BROTHERS INC (TOL) is 10.85 and the Price/Book (PB) ratio is 1.71.

What is the earnings growth outlook for TOLL BROTHERS INC?

The Earnings per Share (EPS) of TOLL BROTHERS INC (TOL) is expected to decline by -4.38% in the next year.