Fact based stock research
D.R. Horton (NYSE:DHI)

US23331A1097

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

D.R. Horton stock research in summary

drhorton.com

ANALYSIS: With an Obermatt Combined Rank of 82 (better than 82% compared with investment alternatives), D.R. Horton (Homebuilding, USA) shares have much better financial characteristics than comparable stocks. Shares of D.R. Horton are low in value (priced high) with a consolidated Value Rank of 43 (worse than 57% of alternatives) and show below-average growth (Growth Rank of 29) but are safely financed (Safety Rank of 88), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 82, is a strong buy recommendation based on D.R. Horton's financial characteristics. As the company D.R. Horton's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 43) and low growth (Obermatt Growth Rank of 29), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 88) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	43
Growth Rank	29
Safety Rank	88
Combined Rank	82

Country	USA
Industry	Homebuilding
Index	Dividends USA, S&P US Luxury, S&P 500
Size class	XX-Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: D.R. Horton

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	63	77	65	43
GROWTH
GROWTH	87	51	73	29
SAFETY
SAFETY	65	88	88	88
SENTIMENT
SENTIMENT	n/a	33	89	^new
360° VIEW
360° VIEW	n/a	67	49	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better D.R. Horton is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	63	77	65	43
GROWTH
GROWTH	87	51	73	29
SAFETY
SAFETY	65	88	88	88
COMBINED
COMBINED	87	82	82	82

Last update of combined financial performance: 10-Nov-2022. Stock analysis on combined financial performance: The higher the rank of D.R. Horton the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 43 (worse than 57% compared with alternatives), D.R. Horton shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for D.R. Horton. Price-to-Profit (also referred to as price-earnings, P/E) is 50 which means that the stock price compared with what market professionals expect for future profits is lower than for 50% of comparable companies, indicating a good value concerning D.R. Horton's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 43, which means that the stock price is lower as regards to invested capital than for 43% of comparable investments. On the other hand, Price-to-Sales is less favorable than 72% of alternatives (only 28% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 29% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 43, is a hold recommendation based on D.R. Horton's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	52	53	23	28
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	83	64	59	50
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	37	63	59	43
DIVIDEND YIELD
DIVIDEND YIELD	51	77	76	71
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	63	77	65	43

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of D.R. Horton; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 29 (better than 29% compared with alternatives), D.R. Horton shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for D.R. Horton. Sales Growth has a rank of 63 which means that currently professionals expect the company to grow more than 63% of its competitors. Stock Returns are also above average with a rank of 53. But Capital Growth has only a rank of 36, which means that currently professionals expect the company to grow its invested capital less than 64% of its competitors. Profit Growth is also low, with a rank of only 23, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 29, is a hold recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 53% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	70	31	43	63
PROFIT GROWTH
PROFIT GROWTH	75	29	77	23
CAPITAL GROWTH
CAPITAL GROWTH	n/a	69	62	36
STOCK RETURNS
STOCK RETURNS	69	83	69	53
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	87	51	73	29

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of D.R. Horton.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 88 (better than 88% compared with alternatives) for 2022, the company D.R. Horton has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of D.R. Horton is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for D.R. Horton. Leverage is at 62, meaning the company has a below-average debt-to-equity ratio. It has less debt than 62% of its competitors. Refinancing is at a rank of 69, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 69% of its competitors. Finally, Liquidity is also good at a rank of 90, which means that the company generates more profit to service its debt than 90% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 88 (better than 88% compared with alternatives), D.R. Horton has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with D.R. Horton but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	29	64	66	62
REFINANCING
REFINANCING	84	69	69	69
LIQUIDITY
LIQUIDITY	57	98	79	90
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	65	88	88	88

Last update of Safety Rank: 10-Nov-2022. Stock analysis on safety metrics: The higher the rank, the lower the leverage of D.R. Horton and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	78	64	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	16	68	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	61	100	^new
MARKET PULSE
MARKET PULSE	n/a	10	18	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	33	89	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for D.R. Horton.
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