Is DR Horton (NYSE:DHI) undervalued?

DHI Stock

USD 96.52 0.29 0.30%

Macroaxis Story

DR Horton Earnings before Tax are most likely to increase significantly in the upcoming years. The last year's value of Earnings before Tax was reported at 3.42 Billion. The current Enterprise Value is estimated to increase to about 36.5 B, while Revenue Per Employee is projected to decrease to roughly 1.8 M. As many millenniums are excited about consumer cyclical space, it is only fair to concentrate on DR Horton. We will evaluate if DR Horton shares are reasonably priced going into December. In this post, I will also go over some essential variables affecting DR Horton's products, and show how it may impact the entity outlook for active traders this year.

Published over two months ago

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The firm owns a Beta (Systematic Risk) of 1.4184, which means a somewhat significant risk relative to the market. Let's try to break down what DR Horton's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, DR Horton will likely underperform. Even though it is essential to pay attention to DR Horton existing price patterns, it is always good to be careful when utilizing equity price patterns. Our way in which we are predicting any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. DR Horton exposes twenty-eight different technical indicators, which can help you to evaluate its performance. DR Horton has an expected return of -0.08%. Please be advised to confirm DR Horton sortino ratio, semi variance, and the relationship between the information ratio and value at risk to decide if DR Horton performance from the past will be repeated sooner or later.

And What about dividends?

A dividend is the distribution of a portion of DR Horton earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. DR Horton dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. DR Horton one year expected dividend income is about USD0.58 per share.

DR Horton Dividend Yield is most likely to slightly decrease in the upcoming years. The last year's value of Dividend Yield was reported at 0.0081. The current Dividends per Basic Common Share is estimated to increase to 0.87, while Payment of Dividends and Other Cash Distributions is projected to decrease to (236.5 M).

	Last Reported	Projected for 2023
Payment of Dividends and Other Cash Distributions	-230.4 M	-236.5 M
Dividend Yield	0.0081	0.0086
Dividends per Basic Common Share	0.81	0.87

Investing in dividend-paying stocks, such as DR Horton is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in DR Horton must own a stock before its ex-dividend date to receive its next dividend.

This type of analysis is very useful when you want to generate a past dividend schedule and payout information for DR Horton. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.

How important is DR Horton's Liquidity

DR Horton financial leverage refers to using borrowed capital as a funding source to finance DR Horton ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. DR Horton financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between DR Horton's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.

It is good to see analyst projects for DR Horton, but it might be worth checking our own buy vs. sell analysis

What did DR Horton file with SEC?

The SEC filings are financial statements or other formal documents of DR Horton that are regularly submitted to the U.S. Securities and Exchange Commission (SEC). Public companies, certain insiders, and broker-dealers are required to make SEC filings and fintech professionals rely on these filings for information about companies they are evaluating for investment purposes. Please note, most SEC filings are available online through the SEC's EDGAR database.

Please check here for more information.

Please note, although all public domestic companies are required to submit their filings via EDGAR, not all public companies are available through our service. Also, keep in mind that the actual annual reports to DR Horton shareholders may or may not be submitted as SEC does not always require it.

	10th of August 2022 Unclassified Corporate Event	View
	21st of July 2022 Financial Statements and Exhibits. Results of Operations and Financial Condition	View

Exercise or conversion by Bill Wheat of 5930 shares of DR Horton subject to Rule 16b-3

Legal trades by DR Horton insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:

DR Horton insider trading alert for exercise of common stock by Bill Wheat, EVP and CFO, on 29th of November 2022. This event was filed by Horton D R Inc with SEC on 2022-11-29. Statement of changes in beneficial ownership - SEC Form 4. Bill Wheat currently serves as chief financial officer, executive vice president of DR Horton [view details]

Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

What is the case for DR Horton Investors

The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. DR Horton has an asset utilization ratio of 276.41 percent. This implies that the company is making $2.76 for each dollar of assets. An increasing asset utilization means that DR Horton is more efficient with each dollar of assets it utilizes for everyday operations.

	2021	2022 (projected)
Long Term Debt to Equity	0.42	0.55
Interest Coverage	628.15	677.74

Long Term Debt to Equity Interest Coverage

Will DR Horton price drop impact its balance sheet?

Current Market Risk Adjusted Performance is up to -0.03. Price may drop again. DR Horton exhibits very low volatility with skewness of -0.03 and kurtosis of 0.21. However, we advise investors to further study DR Horton technical indicators to ensure that all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure DR Horton's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact DR Horton's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

The Bottom Line

While many of the other players in the residential construction industry are either recovering or due for a correction, DR Horton may not be as strong as the others in terms of longer-term growth potentials. With an impartial outlook on the current market volatility, it may be better to hold off any inventment activity and neither pick up nor drop any shares of DR Horton at this time. The DR Horton risk-reward trade off is not appealing enough to do any trading. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to DR Horton.

Editorial Staff

Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management. View Profile

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of DR Horton. Please refer to our Terms of Use for any information regarding our disclosure principles.

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