Stock of the Day

October 30, 2019

D.R. Horton (DHI)

$125.92
-$2.76 (-2.1%)
Market Cap: $39.70B

About D.R. Horton

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 118 markets across 33 states 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 townhomes, 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; and owns non-residential real estate, including ranch land and improvements. It primarily serves homebuyers. D.R. Horton, Inc. was founded in 1978 and is headquartered in Arlington, Texas.

D.R. Horton Bull Case

Here are some ways that investors could benefit from investing in D.R. Horton, Inc.:

  • D.R. Horton, Inc. reported earnings per share (EPS) of $2.61, exceeding analysts' expectations of $2.37, indicating strong financial performance and effective management.
  • The company has a solid market capitalization of approximately $40.87 billion, reflecting its stability and growth potential in the homebuilding sector.
  • With a current stock price of $129.71, D.R. Horton, Inc. is trading below its one-year high of $199.85, suggesting potential for price appreciation.
  • The firm has a low debt-to-equity ratio of 0.20, indicating a conservative approach to leverage and financial risk, which can be attractive to risk-averse investors.
  • D.R. Horton, Inc. has a dividend yield of 1.23%, providing investors with a steady income stream, which is particularly appealing in uncertain market conditions.

D.R. Horton Bear Case

Investors should be bearish about investing in D.R. Horton, Inc. for these reasons:

  • The company's revenue decreased by 1.5% year-over-year, which may indicate challenges in maintaining growth in a competitive market.
  • Analysts have mixed ratings on the stock, with a consensus rating of "Hold," suggesting uncertainty about its future performance.
  • Recent insider selling, including a transaction where a director sold 5,650 shares, could signal a lack of confidence in the company's short-term prospects.
  • With a price-to-earnings (P/E) ratio of 9.17, while it may seem attractive, it could also indicate that the stock is undervalued due to underlying issues.
  • The company's return on equity (ROE) of 18.48% is respectable, but it is lower than the previous year's performance, which may raise concerns about efficiency and profitability.

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