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Category: Beazers (BZH) and D.R Horton (DHI)
Date: 7 July 2020 Stock price of Beazers (BZH): $10.11 Stock price of D.R Horton : $55.92 Battle of the home building firms. We take a look at Beazers (BZH) and D.R Horton (DHI) stock performance over the last couple of years and look at which stock offers the best prospects for future growth based on their current financial position and their current stock price.
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So if one had to buy one of these two homebuilders stocks now which one is the better buy? Does the stock of Beazer provide a greater buying opportunity because it declined significantly while the stock of D.R Horton surged over the same time period? Or is there a fundamental reason why the stock of Beazer struggled so much while the stock of D.R Horton exceled? "
More About D.R Horton
D.R. Horton, Inc., America’s Builder, has been the largest homebuilder by volume in the United States since 2002. Founded in 1978 in Fort Worth, Texas, D.R. Horton has operations in 90 markets in 29 states across the United States and closed 56,975 homes during its fiscal year ended September 30, 2019. The Company is engaged in the construction and sale of high-quality homes through its diverse brand portfolio that includes D.R. Horton, Emerald Homes, Express Homes and Freedom Homes with sales prices ranging from $100,000 to over $1,000,000. D.R. Horton also provides mortgage financing, title services and insurance agency services for homebuyers through its mortgage, title and insurance subsidiaries.
Overview of D.R Horton's latest earnings report
Overview of D.R Horton's latest earnings report
- Revenues: $4.5 billion (up from $4.128 billion for the same quarter of the previous year
- Revenue increased by 9.01% over the last 12 months
- Cost of sales: $3.450 billion (up from $3.256 billion for the same quarter of the previous year)
- Cost of sales increased by 5.96% over the last 12 months
- Net income: $482.7 million (up from $351.3 million for the same quarter of the previous year)
- Diluted earnings per share: $1.30 (up from $0.93 for the same quarter of the previous year)
- PE ratio of D.R Horton: 10.8
- Diluted weighted-average shares outstanding: 370.1 million (down from 377.7 million for the same quarter of the previous year)
- Cash and cash equivalents: $1.522 billion
- Cash and cash equivalents per share: $4.11
- Cash and cash equivalents makes up 7.4% of D.R Horton's market capital
- Cash and cash equivalents makes up 23.8% of D.R Horton's total assets
- Cash and cash equivalents per share: $4.11
- Inventories: $12.224 billion
- Inventories makes up 71.3% of D.R Horton's total assets
- Stockholders equity of D.R Horton : $10.458 billion
- Stockholders equity per share: $28.25
- D.R Horton is trading at 1.97 times its stockholders equity per share which is within the expected range of between 2 and 4 that most firms tend to trade at
- Stockholders equity per share: $28.25
More About Buckle Inc (BKE)
Headquartered in Atlanta, Beazer Homes (NYSE:BZH) is one of the country’s largest homebuilders. Every Beazer home is designed and built to provide Surprising Performance, giving you more quality and more comfort from the moment you move in - saving you money every month. With Beazer’s Choice Plans™, you can personalize your primary living areas - giving you a choice of how you want to live in the home, at no additional cost. And unlike most national homebuilders, we empower our customers to shop and compare loan options. Our Mortgage Choice program gives you the resources to easily compare multiple loan offers and choose the best lender and loan offer for you, saving you thousands over the life of your loan. We build our homes in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia.
Overview of Beazer Home's latest earnings report
Overview of Beazer Home's latest earnings report
- Revenues: $489.413 million (up from $421.260 million from the same quarter of the previous year)
- Revenues increased by 16.2% over the last 12 months
- Home construction and sales expenses: $410.568 million (up from $356.329 million for the same quarter of the previous year)
- Sales expenses increased by 15.2% over the last 12 months
- So margins gains for Beazer Homes as expenses increased at a slower rate than their revenues
- Net income: $10.614 million (down from -$100.860 million loss for the same quarter of the previous year)
- Diluted earnings per share: $0.36 (up from -$3.28 for the same quarter of the previous year)
- PE ratio of Beazer Homes: 7
- Diluted weighted-average shares outstanding: 29.975 million (down from 30.078 million for the same quarter of the previous year)
- Cash and cash equivalents: $294.265 million
- Cash and cash equivalents per share: $9.82
- Cash and cash equivalents makes up 97.1% of Beazer Homes' market capital
- Cash and cash equivalents makes up 13.1% of Beazer Homes' total assets
- Cash and cash equivalents per share: $9.82
- Owned inventory: $1.595 billion
- Owned inventory makes up 71.2% of Beazer Homes' total assets
- Stockholders equity in Beazer Homes: $547.482 million
- Stockholders equity per share in Beazer Homes: $18.26
- So Beazer Homes is trading at 0.54 times its stockholders equity per share. It is rather unusual to see a company trading at less than its stockholders equity per share. Most firms tend to trade at between 2 and 4 times its stockholders equity per share.
- Stockholders equity per share in Beazer Homes: $18.26
Beazer Homes (BZH) stock vs D.R Horton (DHI) stock
The image below shows the stock price performance of Beazer Homes (BZH) and D.R Horton (DHI) over the last 3 years. Both these firms are active in the homebuilding sector but their stock price trends are totally different. Over the 3 year period D.R Horton stock increased by 52.95% while the stock of Beazer Homes (BZH) declined by a 24.4%
So does the stock of Beazer Homes (BZH) provide a greater buying opportunity because it has decline significantly over the three year period while the stock of D.R Horton increased strongly over the same three year period or is there a fundamental financial reason why the stock of Beazer has declined so much while so much while the stock of D.R Horton increased significantly
So does the stock of Beazer Homes (BZH) provide a greater buying opportunity because it has decline significantly over the three year period while the stock of D.R Horton increased strongly over the same three year period or is there a fundamental financial reason why the stock of Beazer has declined so much while so much while the stock of D.R Horton increased significantly
So if one had to buy one of these two homebuilders stocks now which one is the better buy? Does the stock of Beazer provide a greater buying opportunity because it declined significantly while the stock of D.R Horton surged over the same time period? Or is there a fundamental reason why the stock of Beazer struggled so much while the stock of D.R Horton exceled?
One of our key metrics is the Price to Stockholders equity per share ratio. When looking at this we find the following for both stocks:
Based on this metric Beazer Homes offers far more value than D.R Horton. Most firms tend to trade at a ratio of between 2 and 4 times. While both firms are trading at below the expected range, D.R Horton is just below the expected range while Beazer's is far away from the expected range. At his point if Beazer's sells all their assets and pays all their liabilities investors will get almost double what the current stock price is while D.R Horton stockholders will basically get half of what their stock price is worth. Therefore for this metric Beazer's offers the best value.
Looking at the Price to Earnings ratio of the two homebuilders:
Next up cash as percentage of stock price. Cash per share makes up just over 97% of Beazers stock price while D.R Horton's cash makes up 7.4% of their stock price. Total cash as percentage of total assets is as follows.
Cash makes up 13.1% of Beazers total assets while D.R Horton's cash makes up around 23.8% of their total assets. So it does look like D.R Hortons is better placed to ride out difficult times as is currently being experienced during Covid-19 as their cash as percentage of total assets is far greater than that of Beazers and they would therefore be far less likely to borrow money to keep their operations afloat during the Covid-19 pandemic.
So Beazer Homes has the lower PE ratio and the better Price/Stockholders equity per share ratio, and Beazer's cash makes up almost 100% of the group's current stock price. So basically if you buy the stock of Beazer's now you buy all their cash and get the rest of their assets for free. The only negative for Beazer Homes compared to D.R Horton is the fact that D.R Horton's cash as percentage of total assets is far greater than that of Beazers.
But all things considered if we have to buy one of these two homebuilder's stock right now, we rate the stock of Beazer Homes (BZH) as the Winner.
- Price/Stockholders equity per share for Beazer Homes: 0.54
- Price/Stockholders equity per share for D.R Horton : 1.97
Based on this metric Beazer Homes offers far more value than D.R Horton. Most firms tend to trade at a ratio of between 2 and 4 times. While both firms are trading at below the expected range, D.R Horton is just below the expected range while Beazer's is far away from the expected range. At his point if Beazer's sells all their assets and pays all their liabilities investors will get almost double what the current stock price is while D.R Horton stockholders will basically get half of what their stock price is worth. Therefore for this metric Beazer's offers the best value.
Looking at the Price to Earnings ratio of the two homebuilders:
- PE ratio of Beazer Homes: 7
- PE ratio of D.R Horton: 10.8
Next up cash as percentage of stock price. Cash per share makes up just over 97% of Beazers stock price while D.R Horton's cash makes up 7.4% of their stock price. Total cash as percentage of total assets is as follows.
Cash makes up 13.1% of Beazers total assets while D.R Horton's cash makes up around 23.8% of their total assets. So it does look like D.R Hortons is better placed to ride out difficult times as is currently being experienced during Covid-19 as their cash as percentage of total assets is far greater than that of Beazers and they would therefore be far less likely to borrow money to keep their operations afloat during the Covid-19 pandemic.
So Beazer Homes has the lower PE ratio and the better Price/Stockholders equity per share ratio, and Beazer's cash makes up almost 100% of the group's current stock price. So basically if you buy the stock of Beazer's now you buy all their cash and get the rest of their assets for free. The only negative for Beazer Homes compared to D.R Horton is the fact that D.R Horton's cash as percentage of total assets is far greater than that of Beazers.
But all things considered if we have to buy one of these two homebuilder's stock right now, we rate the stock of Beazer Homes (BZH) as the Winner.