TOLL BROTHERS INC (TOL) Stock Fundamental Analysis
NYSE:TOL - New York Stock Exchange, Inc. - US8894781033 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to TOL. TOL was compared to 64 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.
1. Profitability
1.1 Basic Checks
In the past year TOL was profitable.
TOL had a positive operating cash flow in the past year.
TOL had positive earnings in each of the past 5 years.
Each year in the past 5 years TOL had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 9.72%, TOL is doing good in the industry, outperforming 76.56% of the companies in the same industry.
TOL has a better Return On Equity (17.36%) than 76.56% of its industry peers.
TOL has a better Return On Invested Capital (12.34%) than 78.13% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TOL is above the industry average of 10.34%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.72% | ||
| ROE | 17.36% | ||
| ROIC | 12.34% |
ROA(3y)11.06%
ROA(5y)8.89%
ROE(3y)20.7%
ROE(5y)17.4%
ROIC(3y)13.26%
ROIC(5y)10.59%
1.3 Margins
TOL has a better Profit Margin (12.95%) than 92.19% of its industry peers.
In the last couple of years the Profit Margin of TOL has grown nicely.
TOL has a better Operating Margin (16.72%) than 90.63% of its industry peers.
In the last couple of years the Operating Margin of TOL has grown nicely.
Looking at the Gross Margin, with a value of 26.21%, TOL is in line with its industry, outperforming 53.13% of the companies in the same industry.
TOL's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.72% | ||
| PM (TTM) | 12.95% | ||
| GM | 26.21% |
OM growth 3Y17.51%
OM growth 5Y14.86%
PM growth 3Y15.15%
PM growth 5Y12.14%
GM growth 3Y8.08%
GM growth 5Y7.34%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TOL is creating some value.
The number of shares outstanding for TOL has been reduced compared to 1 year ago.
Compared to 5 years ago, TOL has less shares outstanding
The debt/assets ratio for TOL has been reduced compared to a year ago.
2.2 Solvency
TOL has an Altman-Z score of 3.86. This indicates that TOL is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.86, TOL is in the better half of the industry, outperforming 65.63% of the companies in the same industry.
The Debt to FCF ratio of TOL is 3.87, which is a good value as it means it would take TOL, 3.87 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 3.87, TOL is in the better half of the industry, outperforming 64.06% of the companies in the same industry.
TOL has a Debt/Equity ratio of 0.35. This is a healthy value indicating a solid balance between debt and equity.
TOL has a Debt to Equity ratio (0.35) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 3.87 | ||
| Altman-Z | 3.86 |
ROIC/WACC1.47
WACC8.41%
2.3 Liquidity
A Current Ratio of 3.54 indicates that TOL has no problem at all paying its short term obligations.
TOL's Current ratio of 3.54 is fine compared to the rest of the industry. TOL outperforms 65.63% of its industry peers.
TOL has a Quick Ratio of 3.54. This is a bad value and indicates that TOL is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of TOL (0.29) is worse than 90.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.54 | ||
| Quick Ratio | 0.29 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.07% over the past year.
Measured over the past years, TOL shows a very strong growth in Earnings Per Share. The EPS has been growing by 27.96% on average per year.
The Revenue has been growing slightly by 1.59% in the past year.
The Revenue has been growing by 8.47% on average over the past years. This is quite good.
EPS 1Y (TTM)0.07%
EPS 3Y27.67%
EPS 5Y27.96%
EPS Q2Q%3.55%
Revenue 1Y (TTM)1.59%
Revenue growth 3Y7.26%
Revenue growth 5Y8.47%
Sales Q2Q%2.25%
3.2 Future
The Earnings Per Share is expected to grow by 9.53% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.32% on average over the next years.
EPS Next Y1.85%
EPS Next 2Y2.06%
EPS Next 3Y5.35%
EPS Next 5Y9.53%
Revenue Next Year2.58%
Revenue Next 2Y0.98%
Revenue Next 3Y2.69%
Revenue Next 5Y7.32%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
TOL is valuated reasonably with a Price/Earnings ratio of 8.74.
TOL's Price/Earnings ratio is a bit cheaper when compared to the industry. TOL is cheaper than 67.19% of the companies in the same industry.
TOL is valuated cheaply when we compare the Price/Earnings ratio to 27.45, which is the current average of the S&P500 Index.
TOL is valuated reasonably with a Price/Forward Earnings ratio of 8.16.
Based on the Price/Forward Earnings ratio, TOL is valued a bit cheaper than the industry average as 75.00% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of TOL to the average of the S&P500 Index (21.90), we can say TOL is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.74 | ||
| Fwd PE | 8.16 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TOL indicates a somewhat cheap valuation: TOL is cheaper than 64.06% of the companies listed in the same industry.
TOL's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. TOL is cheaper than 68.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.01 | ||
| EV/EBITDA | 7.34 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of TOL may justify a higher PE ratio.
PEG (NY)4.72
PEG (5Y)0.31
EPS Next 2Y2.06%
EPS Next 3Y5.35%
5. Dividend
5.1 Amount
With a yearly dividend of 0.85%, TOL is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.29, TOL pays a bit more dividend than its industry peers.
With a Dividend Yield of 0.85, TOL pays less dividend than the S&P500 average, which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.85% |
5.2 History
The dividend of TOL is nicely growing with an annual growth rate of 15.67%!
TOL has been paying a dividend for over 5 years, so it has already some track record.
As TOL did not decrease their dividend in the past 5 years, we can say the dividend looks stable.
Dividend Growth(5Y)15.67%
Div Incr Years4
Div Non Decr Years7
5.3 Sustainability
6.91% 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.
DP6.91%
EPS Next 2Y2.06%
EPS Next 3Y5.35%
117.79
-2.47 (-2.05%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Durables & Apparel
GICS IndustryHousehold Durables
Earnings (Last)
Earnings (Next)
Inst Owners92.97%
Inst Owner Change2.31%
Ins Owners0.69%
Ins Owner Change1.77%
Market Cap11.58B
Analysts76.52
Price Target139.67 (18.58%)
Short Float %3.52%
Short Ratio2.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.85% |
Yearly Dividend0.92
Dividend Growth(5Y)15.67%
DP6.91%
Div Incr Years4
Div Non Decr Years7
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)3.7%
Min EPS beat(2)-15.06%
Max EPS beat(2)22.46%
EPS beat(4)3
Avg EPS beat(4)5.19%
Min EPS beat(4)-15.06%
Max EPS beat(4)22.46%
EPS beat(8)6
Avg EPS beat(8)8.23%
EPS beat(12)10
Avg EPS beat(12)12.69%
EPS beat(16)14
Avg EPS beat(16)13.65%
Revenue beat(2)1
Avg Revenue beat(2)1.75%
Min Revenue beat(2)-4.38%
Max Revenue beat(2)7.87%
Revenue beat(4)2
Avg Revenue beat(4)1.24%
Min Revenue beat(4)-4.38%
Max Revenue beat(4)7.87%
Revenue beat(8)6
Avg Revenue beat(8)3.37%
Revenue beat(12)9
Avg Revenue beat(12)5.25%
Revenue beat(16)11
Avg Revenue beat(16)4.74%
PT rev (1m)-2.06%
PT rev (3m)-6.85%
EPS NQ rev (1m)-8.87%
EPS NQ rev (3m)-12.71%
EPS NY rev (1m)2.55%
EPS NY rev (3m)0.54%
Revenue NQ rev (1m)-1.27%
Revenue NQ rev (3m)-3.52%
Revenue NY rev (1m)1.43%
Revenue NY rev (3m)0.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.74 | ||
| Fwd PE | 8.16 | ||
| P/S | 1.09 | ||
| P/FCF | 16.01 | ||
| P/OCF | 14.47 | ||
| P/B | 1.46 | ||
| P/tB | 1.46 | ||
| EV/EBITDA | 7.34 |
EPS(TTM)13.48
EY11.44%
EPS(NY)14.44
Fwd EY12.26%
FCF(TTM)7.36
FCFY6.25%
OCF(TTM)8.14
OCFY6.91%
SpS108.41
BVpS80.84
TBVpS80.84
PEG (NY)4.72
PEG (5Y)0.31
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.72% | ||
| ROE | 17.36% | ||
| ROCE | 16.48% | ||
| ROIC | 12.34% | ||
| ROICexc | 13.18% | ||
| ROICexgc | 13.32% | ||
| OM | 16.72% | ||
| PM (TTM) | 12.95% | ||
| GM | 26.21% | ||
| FCFM | 6.79% |
ROA(3y)11.06%
ROA(5y)8.89%
ROE(3y)20.7%
ROE(5y)17.4%
ROIC(3y)13.26%
ROIC(5y)10.59%
ROICexc(3y)15.3%
ROICexc(5y)12.36%
ROICexgc(3y)15.57%
ROICexgc(5y)12.57%
ROCE(3y)17.71%
ROCE(5y)14.14%
ROICexcg growth 3Y16.35%
ROICexcg growth 5Y20.45%
ROICexc growth 3Y16.42%
ROICexc growth 5Y20.38%
OM growth 3Y17.51%
OM growth 5Y14.86%
PM growth 3Y15.15%
PM growth 5Y12.14%
GM growth 3Y8.08%
GM growth 5Y7.34%
F-Score4
Asset Turnover0.75
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.35 | ||
| Debt/FCF | 3.87 | ||
| Debt/EBITDA | 1.5 | ||
| Cap/Depr | 91.65% | ||
| Cap/Sales | 0.72% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 42.87% | ||
| Profit Quality | 52.41% | ||
| Current Ratio | 3.54 | ||
| Quick Ratio | 0.29 | ||
| Altman-Z | 3.86 |
F-Score4
WACC8.41%
ROIC/WACC1.47
Cap/Depr(3y)93.15%
Cap/Depr(5y)105.24%
Cap/Sales(3y)0.7%
Cap/Sales(5y)0.88%
Profit Quality(3y)72.56%
Profit Quality(5y)113.39%
High Growth Momentum
Growth
EPS 1Y (TTM)0.07%
EPS 3Y27.67%
EPS 5Y27.96%
EPS Q2Q%3.55%
EPS Next Y1.85%
EPS Next 2Y2.06%
EPS Next 3Y5.35%
EPS Next 5Y9.53%
Revenue 1Y (TTM)1.59%
Revenue growth 3Y7.26%
Revenue growth 5Y8.47%
Sales Q2Q%2.25%
Revenue Next Year2.58%
Revenue Next 2Y0.98%
Revenue Next 3Y2.69%
Revenue Next 5Y7.32%
EBIT growth 1Y-11.15%
EBIT growth 3Y26.05%
EBIT growth 5Y24.59%
EBIT Next Year-1.66%
EBIT Next 3Y2.47%
EBIT Next 5Y6.53%
FCF growth 1Y-42.83%
FCF growth 3Y-8.84%
FCF growth 5Y21.71%
OCF growth 1Y-40.17%
OCF growth 3Y-8.14%
OCF growth 5Y18.21%