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Fundamental analysis: D.R. Horton, Inc. (DHI)

Awarener score: 8.6

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Excellent), the business stability (Excellent) and growth (Very good), and the company's inclination to return cash to the stockholders (Very good).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 8.5

  • Business has been growing at a very good pace. It's been more than average in relation to peer companies.
  • D.R. Horton, Inc. business trend stability is excellent. The higher the stability, the lower the risk. It looks well ranked against rivals.

Margins score: 7.5

  • DHI profit margins -on goods and services sold- are usually hardly sufficient. They stand better than most rival companies.
  • Business profit on sales tends to be excellent. It's great when measured against competitors.
  • Profits on sales made -available to repay debt and purchase properties- are usually good. They remain in good shape compared to peers.
  • Earnings -before income taxes and interests on loans taken- tend to be very good in relation to total revenues. They're still well ranked against similar companies.
  • Profits -before income taxes- are usually very good considering total sales, and remain great when measured against rivals.
  • Total net profit tends to be very good when confronted to sales. Company stands more than average in relation to comparable firms.

Growth score: 8.0

  • D.R. Horton, Inc. profit -on goods and services sold- has been growing at a very good pace. It's been a slight improvement compared to competitors.
  • In recent years, earnings -on operations- have been growing at a very good step, which has been somewhat better than comparable firms.
  • Profits -available to repay debt and purchase properties- have been growing at a very good pace, which compares similar to peer enterprises.
  • Earnings -before income taxes and interests on loans taken- have been growing at a very good tempo. It turns to be rather normal in relation to similar stocks.
  • In past years, profits -before income taxes- grew at a very good speed. It was somewhat better than rivals.
  • In the previous years, growth trend on total net profit has been very good, and similar to peer companies.
  • Earnings per share have grown at a very good rhythm in past years. It's been rather normal in relation to industry peers.

Miscellaneous score: 5.0

  • DHI had to pay some income taxes in relation to profits made in the past years. It's been slightly worse than peers.
  • The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
  • We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 9.8

  • D.R. Horton, Inc. usually gets huge returns on the resources it controls. It proves great when measured against peer firms.
  • The company normally gets huge proceeds -on the resources directly invested in the business-. They remain in good shape compared to similar companies.
  • Profitability -in relation to owned resources- is usually paramount. It ranks more than average in relation to competitors.
  • In the past, got excellent returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's more than average in relation to comparable enterprises.

Usage of Funds score: 7.8

  • DHI usually uses a modest portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments isn't too high. It stands more than average in relation to rival firms.
  • The company is usually largely investing in new property, plant, and equipment, to expand its operating capabilities, which is great when measured against industry peers.
  • In the past twelve months it paid low dividends, considering the current stock price. It came worse than most competitors.
  • Has increased dividend payments in the past years. Business prospects may have improved. The company has behaved in a very weak position compared to similar firms.
  • Dividend payments usually represent a slight portion of genuine funds generation and are most likely safe. Sustainability looks somewhat worse than comparable companies.
  • The company usually reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains a slight improvement compared to peer enterprises.
  • Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands excellent in relation to rivals.
  • The company uses a low portion of genuine fund generation to reward investors, which can most likely be sustained. It still looks below average when measured against competitors.

Balance Sheet score: 5.1

  • D.R. Horton, Inc. intangible assets (like brands and goodwill) represent a non-significant portion of resources controlled, according to accounting books, which is safer. It happens to be almost average when measured against peer companies.
  • The company has more than enough short-term resources to face short-term obligations. Liquidity concerns are non-significant. It turns to be lacking compared to similar firms.
  • Roughly a tenth of resources controlled were provided for with financial debt. Creditors have minor claims on the company, and financial position is safe. It remains somewhat worse than rival firms.
  • Most controlled resources can be made into cash reasonably quick, which is good for liquidity and risk. It looks below average when measured against rivals.
  • For every dollar of short-term obligations, the company has less than a dollar of cash and short-term receivables. It's in a very weak position compared to peer firms.
  • For every dollar of short-term obligations, the company has roughly half of cash and equivalents, which is mediocre against similar enterprises.
  • Usually, sales are on cash. It still ranks great when measured against peers.
  • Normally has more than six months of sales worth in inventory. It comes up as close to average when compared to competitors.
  • On average, it takes plenty of months from the purchase to charging customers. It happens to be slightly worse than peers.
  • On average pays suppliers before a month from the purchase. It ranks encouraging in relation to industry peers.
  • The company pays its suppliers plenty of months before charging its customers, so there's a lot of money invested in working capital. It's close to average when compared to similar companies.
  • To what extent normalized EBITDA covers interest expenses is not known. It stands impossible to compare against rival firms.
  • Business earnings have usually been very good when measured against loans taken. Cutting back reinvesting in the business, it could take less than two years to repay the obligations with current profitability. It ranks below average when measured against comparable enterprises.
  • Revenues are huge in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements, allows the company to keep more money to reward stockholders in the long run. It looks lacking compared to similar firms.
  • Resource exploitation is excellent when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still slightly better than peer companies.

Valuation score: 7.4

  • D.R. Horton, Inc. looks very cheap in relation to profits and financial position. It happens to be below average when measured against competitors.
  • Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains lacking compared to peers.
  • In the past twelve months, the company neither generated nor consumed funds. Whatever funds it could get, it reinvested in the business, which stands worse than most similar companies.
  • The company usually generates much more genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share might be very interesting. It's still similar to industry firms.
  • In the past twelve months, the company has slightly rewarded investors, considering both dividends and share on the pie of earnings. It came up close to average when compared to peer ventures.
  • The company has barely more debt than cash. It may borrow extra money if it wishes so, or start cumulating cash for future uses. It looks mediocre against similar enterprises.
  • Considering the past twelve months, traditional Price-to-Earnings relation looks very cheap. Possible reasons are that the market might be betting current earnings will be hard to sustain through time, or that the company has very high fund needs, or a weak financial position, among others. If that isn't the case, the current stock price might be very attractive. It ranks weak when measured against peer companies.
  • Comparing the current stock price with the past twelve-months revenues gives a more than one-to-one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks lacking compared to rival firms.
  • The relation between the stock price and accounting book value is somewhat high. It's important both to check this metric through time and to compare it with rival companies. The company remains mediocre against peer firms.
  • In the past twelve months, the operating business earned great money when compared to the current stock price and financial position. It happens to be below average when measured against industry peers.
  • In an alternate metric of bang for the buck, the company has usually shown an excellent earnings power ability when measured against the current stock price and financial position. Further analysis is recommended, as the stock might currently be undervalued. It's still close to average when compared to peer companies.

Total score: 7.4


DHI logos

Company at a glance: D.R. Horton, Inc. (DHI)

Sector, industry: Consumer Cyclical, Residential Construction

Market Cap: 32.88 billions

Revenues TTM: 33.68 billions

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. It also provides mortgage financing services; and title insurance policies, and examination and closing services, as well as engages in the residential lot development business. In addition, the company develops, constructs, owns, leases, and sells multi-family and single-family rental properties; owns non-residential real estate, including ranch land and improvements; and owns and operates energy related assets. It primarily serves homebuyers. D.R. Horton, Inc. was founded in 1978 and is headquartered in Arlington, Texas.

Awarener score: 8.6

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Excellent), the business stability (Excellent) and growth (Very good), and the company's inclination to return cash to the stockholders (Very good).