“From June 30, 1992 to September 11, 2019 DR Horton stock returned roughly 3324% versus the S&P 500 return of roughly 625%.. Investing in the household formation theme has been a very profitable investment.”
COMPANY PROFILE
D.R. Horton, Inc., America’s Builder, has been the largest homebuilder by volume in the United States since 2002. Founded in 1978 in Fort Worth, Texas, D.R. Horton has operations in 87 markets in 29 states across the United States and closed 55,625 homes in the twelve-month period ended June 30, 2019. The Company is engaged in the construction and sale of high-quality homes through its diverse brand portfolio that includes D.R. Horton, Emerald Homes, Express Homes and Freedom Homes with sales prices ranging from $100,000 to over $1,000,000. D.R. Horton also provides mortgage financing, title services and insurance agency services for homebuyers through its mortgage, title and insurance subsidiaries.
Recent Earnings
Recent earnings data goes here
Opinion
From a factor scoring perspective versus the other 199 brands in the brands index, here’s where D.R. Horton scores well as of 9/17/19:
86% strong price momentum
81% low price/sales ratio
93% high projected 3YR dividend growth
97% sales surprise last quarter
80% cash on balance sheet versus total market cap
Like LEN, the DHI investment is one focused on demographics and falling interest rates. If the base case is low rates for longer because of slow growth for longer, the home builders should likely thrive in this environment with a large segment of the population beginning the household formation process. The stocks are cheap, they have solid balance sheets and highly attractive assets. These could be sold when/if I see a real potential for a recession but for now, I do not see that on the horizon. In fact, I think people will be surprised at how long this cycle can last given sub-par growth that just muddles along.