Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
-- DR Horton
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, notable return on equity, impressive record of earnings per share growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 28.7%. Since the same quarter one year prior, revenues rose by 15.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 2366.66% and other important driving factors, this stock has surged by 110.06% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Household Durables industry and the overall market, D R HORTON INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- D R HORTON INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, D R HORTON INC reported lower earnings of $0.23 versus $0.73 in the prior year. This year, the market expects an improvement in earnings ($2.74 versus $0.23).
- DHI's debt-to-equity ratio of 0.60 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further.
D.R. Horton, Inc. operates as a homebuilding company in the United States. The company's Homebuilding segment engages in the acquisition and development of land, and construction and sale of residential homes in 25 states and 73 markets in the United States primarily under the D.R. The company has a P/E ratio of 7.3, above the average materials & construction industry P/E ratio of 7 and below the S&P 500 P/E ratio of 17.7. DR Horton has a market cap of $5.76 billion and is part of the
industry. Shares are up 50.8% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.