DHI

D.R. Horton Inc

Industrial/Transportation, Finance/Real Estate


Presented:11/15/2017
Price:$47.53
Cap:$18.06B
Current Price:$189.40
Cap:$61.75B

Presented

Date11/15/2017
Price$47.53
Market Cap$18.06B
Ent Value$17.03B
P/E Ratio17.41x
Book Value$20.66
Div Yield0.84%
Shares O/S380.00M
Ave Daily Vol4,131,758
Short IntN/A

Current

Price$189.40
Market Cap$61.75B
D.R. Horton, Inc. operates as a national homebuilder that engages in the construction and sale of single-family housing. It operates through the Homebuilding and Financial Services segments. The Homebuilding segment includes the sub-segments East, Midwest, Southeast, South Central, Southwest, and West regions. The Financial Services segment provides mortgage financing and title agency services to homebuyers in many of its homebuilding markets. The company was founded by Donald Ray Horton in 1978 and is headquartered in Fort Worth, TX.

Publicly traded companies mentioned herein: BMC Stock Holdings Inc (BMCH), Builders FirstSource Inc (BLDR), DR Horton Inc (DHI), Forestar Group Inc (FOR), Lennar Corp (LEN), NVR Inc (NVR)

Highlights

The presenter is bullish on the outlook for the US housing market, and believes DR Horton (DHI) - the largest homebuilder in the US - is well positioned to benefit from the ongoing recovery. He is long the stock at $47, and explained how the company is in the early innings of a transformation following its acquisition of Forestar (completed in October 2017). In his opinion, the significance of this deal is presently underappreciated by the Street; however, as DHI continues its shift to an “asset light” model, its returns on capital, FCF, and ROE should all improve. Based on his model, DHI can generate $5/ share of earnings in 2020. And, if ROE improves as he expects the multiple should expand from 15x forward earnings (today) to 16-17x forward earnings (his price target range for 2019 is $80-85).

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Idea Discussion

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