DR Horton Inc (DHI): Today's Featured Materials & Construction Laggard

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.

DR Horton ( DHI) pushed the Materials & Construction industry lower today making it today's featured Materials & Construction laggard. The industry as a whole closed the day down 0.7%. By the end of trading, DR Horton fell 34 cents (-1.6%) to $21.09 on light volume. Throughout the day, 3.5 million shares of DR Horton exchanged hands as compared to its average daily volume of 6.6 million shares. The stock ranged in price between $20.85-$21.27 after having opened the day at $21.10 as compared to the previous trading day's close of $21.43. Other companies within the Materials & Construction industry that declined today were: Gafisa ( GFA), down 8.3%, Integrated Electrical Services ( IESC), down 6.9%, China Advanced Construction Materials Group ( CADC), down 4.9%, and MagneGas Corporation ( MNGA), down 4.8%.
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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 $6.87 billion and is part of the industrial goods sector. The company has a P/E ratio of 8.3, below the average materials & construction industry P/E ratio of 8.4 and below the S&P 500 P/E ratio of 17.7. Shares are up 70.3% year to date as of the close of trading on Monday. Currently there are four analysts that rate DR Horton a buy, three analysts rate it a sell, and seven rate it a hold.

TheStreet Ratings rates DR Horton as a buy. 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 impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the materials & construction industry could consider SPDR S&P Homebuilders ETF ( XHB) while those bearish on the materials & construction industry could consider ProShares Short Basic Materials Fd ( SBM).

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