Today I'll be making a purchase in DHI.
Company Profile
D.R. Horton, Inc. operates as a homebuilding company in East, North, Southeast, South Central, Southwest, and Northwest regions in the United States. It engages in the acquisition and development of land; and construction and sale of residential homes in 31 states and 98 markets under the names of D.R. Horton, America’s Builder, Express Homes, Emerald Homes, and Freedom Homes. The company constructs and sells single-family detached homes; and attached homes, such as town homes, duplexes, and triplexes.
The company is a low yield, high dividend growth company. The yield is just 0.88% but the 5 year dividend growth is 20%. The last increase, announced in November was for 13%. According to Simply Safe Dividends, it has a dividend safety rating of 85.
ARGUS RESEARCH RECOMMENDATION: BUY
We are maintaining our BUY rating D.R. Horton Inc. (NYSE: DHI), one of the largest U.S. homebuilders based on homes delivered and revenue. We remain bullish on the long-term outlook for affordable housing. While there are a lot of questions on topics like affordability, cost pressures on builders, the availability of some building materials and what may happen when the fiscal and monetary stimulus end, we believe that the big story is supply and demand. We see a major undersupply of affordable homes. Why? Building has been constrained since the Great Recession and the huge Millennial generation is coming of age as many healthy Baby Boomers are staying in their existing homes, hoping to 'age-in-place.'
THE STREET -- RECOMMENDATION: BUY
We rate D R HORTON INC (DHI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
CFRA -- RECOMMENDATION: BUY
Housing market conditions are mixed story, with strong homebuyer demand exceeding available homes inventory, while supply chain disruptions cause material shortages, delays, and tight labor. DHI has raised pricing to slow down orders, up 17% in order value in FY 21 (Sep.). In Q4 FY 21 order value was 17% lower to $6.0b and order units was 33% lower. Every time DHI opens up new lot releases, homebuyers are there to absorb the release. Average selling price was $346,100, up 14% Y/Y on homes closed.
DHI has consistently outperformed the market in the 1, 3, 5 and 10 year time frames and by a wide margin at that.
1 Year:
DHI ... +49.77%
SPX .. +26.56%
3 Year:
DHI ... +185.1%
SPX .. +74.88%
5 Year:
DHI ... +298.6%
SPX .. +129.1%
10 Year:
DHI ... +858.3%
SPX .. +349.3%
RATINGS SUMMARY:
Wall Street - BULLISH
Quant - VERY BULLISH
FACTOR GRADES:
Valuation .. B
Growth ... A-
Profitability .. B+
Momentum .. A-
Revisions .. B+
Source: Seeking Alpha |
