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, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and compelling growth in net income. 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 29.0%. Since the same quarter one year prior, revenues rose by 15.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.60, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels.
- 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.
- Powered by its strong earnings growth of 2366.66% and other important driving factors, this stock has surged by 90.18% 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Household Durables industry. The net income increased by 2654.9% when compared to the same quarter one year prior, rising from $28.60 million to $787.90 million.
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. DR Horton has a market cap of $6.85 billion and is part of the industrial goods sector and materials & construction industry. The company has a P/E ratio of 8.3, below the S&P 500 P/E ratio of 17.7. Shares are up 69.8% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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