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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
D.R. Horton, Inc. (XNYS:DHI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
DHI
Name:
D.R. HORTON, INC. (XNYS:DHI)
Sector:
- 205000.00K
Industry:
Residential Construction
CEO:
Mr. David Auld
Total Employees:
11,788
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -134.33% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF D.R. HORTON, INC.(DHI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND RESIDENTIAL CONSTRUCTION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
71.38
One Month Price Target:
$72.02
Six Month Price Target :
$75.21
Likely Price in One Year's Time:
Ticker:
$79.05
Likely Trading Range Today Under (Normal Volatility)
$71.08
Price Upper limit ($) :
$71.79
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$67.13
This week:
$61.88
This month :
$52.38
Other Primary facts
Market Cap:
24.32B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
347.48M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.65%
-20.23%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$91.08
$82.00
$51.68
$60.76
Medium risk (<10%) entry points
Buy Call
Sell Call
$79.04
Buy Put:
Sell Put:
$77.10
$63.69
$65.66
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
DHI
Sharpe Ratio:
2.39%
Comparison:
DHI, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -4.30% lower than the industry
& ratio is 4.91% higher than the market/S&P 500 average
Average Returns/Yield of
DHI
Daily returns:
0.08%
Weekly returns:
0.40%
Monthly returns:
1.58%
Yearly returns:
23.00%
Comparison of returns:
Average annual returns/yield (last 3 years) is -17.52% below industry average
Classification:
DHI, is amongst the top 40% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.7
Statistical test of Returns:
DHI has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.94%
Weekly Volatility:
6.56%
Monthly Volatility:
13.13%
Yearly Volatility:
45.48%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.59%
Volatility in last five trading days has been -79.79% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.95%
Weekly VaR:
-13.31%
Monthly VaR:
-26.61%
How Much Can the price of
DHI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-92.19%
This translates to price declining to:
$55.23
This translates to price declining to:
$5.58
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
DHI is a 87.83% riskier investment compared to the market/S&P 500 & is 60.91% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -13.99% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
DHI
Beta in relation to market/S&P 500--1.60
Expected beta in 1 year's time:
0.888
Expected beta in 3 year's time:
1.256
Unlevered (debt free) Beta:
1.267
Beta in relation to Nasdaq (XNAS):
0.982
Beta in relation to all global stocks::
0.849
Beta Comparison & Analysis
Beta of competitors/peers::
1.562
Beta is 2.37% higher than peers
Average Industry Beta:
1.434
Beta is 11.54% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
29.46%
Sustainable growth rate is 5.23% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.049
Alpha is -51.45% below industry average alpha yield
Alpha is 310% higher than market/& is unsustainably high
Analysis of Cost of Capital of
DHI
Equity cost of capital:
0.141
Equity cost of capital is 8.73% above industry mean WACC
Unlevered (without debt) cost of capital:
11.18%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$87.62
Revenue growth rate per share of (3Y):
1.55
Annual revenue growth rate is 193.18% above the industry average
EPS:
$13.97
Expected Annual growth rate of EPS (3Y):
42.16%
Expected future EPS growth rate is 122.00% higher than the Residential Construction industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: 60.15%
Equity growth rate per share is 56.73% higher than the industry
Debt per share
$15.24
EBITDA per share
$18.93
Valuation Analysis Today of
DHI
P/E Ratio:
4.59
P/E Ratio of Competitors/Peers:
10.96
P/E ratio is -58.17% lower than main peers & is -49.81% lower than the industry
Stock price/value with industry average P/E ratio: $127.61
DHI is -44.06% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $23.19
Present value of the expected future dividends only: $7.87
P/S (Price to Sales ratio):
0.81
Price to sales ratio is -42.73% below the industry mean
P/B (Price to book value ratio):
1.55
-
Price to free cash flow ratio is 11.96% higher than the industry
Net income growth rate (3Y):
198.23%
Net income growth rate is 120.94% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 1.59%
Dividend yeild: 1.23%
Previous Dividend: $0.23
Previous adjusted dividend: $0.23
Previous Dividend: $0.88
Expected next dividend best case: $0.24
Expected next dividend worst case: $0.21
Average dividend payment (long-term): $0.20
Average dividend increase/decrease (growth rate) % per period: 2.68%
Expected next dividend payment date: 16/08/2022
Expected next dividend record date: 08/08/2022
-
Previous dividend payment date: 18/05/2022
Previous dividend record date: 05/09/2022
-
Dividend History:
2022-05-06--$0.23
2021-12-03--$0.23
2021-05-07--$0.20
2022-02-16--$0.23
2021-08-09--$0.20
2021-02-16--$0.20
Dividend growth rate is -83.86% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
33.77%
Net debt to equity ratio:
51.72%
Debt to assets ratio:
21.18%
Net debt to assets ratio:
32.43%
Debt-to-asset ratio is -47.53% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
26.13%
Annual debt growth is 514% higher than industry average debt growth rate
Debt repayment rate in last quarter: 4.25%
Analysis of Key Statistics
Correlation of price movement with the market:
0.649
Statistical significance of correlation:
DHI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.555
Stock price is 16.95% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.555
Correlation of price movement with Nasdaq (^IXIC):
-0.007
Covariance of price movement with the market:
-0.012
Kurtosis
5.887
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.387
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
DHI
Gross Profit Margin Ratio:
121%
Operating Profit Margin Ratio:
21.30%
Operating profit margin is 57.02% higher than the industry
Net Profit Margin Ratio:
121%
Effective Tax Rate:
22.58%
Effective tax rate is 10.77% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
32.10%
Return on equity (ROE) is 12.45% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
20.13%
Return on assets (ROA) is 35.50% higher than the industry
Financial Leverage:
1.3x
Current Ratio:
9.54
Current ratio is 23.06% above industry average
Cash Conversion Cycle (days):
63.6
Cash conversion cycle is 252.95% above industry average
The remaining useful life of property plant & equipment is: 9.9 years
Stock based compensation to net income ratio:
0.47%
In-depth Efficiency Analysis
Revenue generated per employee:
2.6M
Each employee generates 57% more revenue than industry average revenue per employee
EBITDA generated per employee:
558.1K
Each employee generates 72% more EBITDA than industry average revenue per employee
Profit generated per employee:
426.9K
Each employee generates 72% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 17.4K
Each employee generates -32% less free cash flow than industry average revenue per employee
Assets/Capital per employee
70.2K
Each employee generates -32% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
DHI
CARVANA CO. (XNYS:CVNA)
LEN-B
LENNAR CORPORATION (XNYS:LEN)
LAS VEGAS SANDS CORP. (XNYS:LVS)
V.F. CORPORATION (XNYS:VFC)
YUM! BRANDS, INC. (XNYS:YUM)
XPENG INC. (XNYS:XPEV)
AUTOZONE, INC. (XNYS:AZO)
Magna International Inc. (XNYS:MGA)
Current Analyst Ratings
Strong buy�25%
Buy�33%
Hold�38%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
30.45B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
21.25B
9.19B
-
-
2.71B
-
-
2.71B
-
-
73.90M
6.58B
6.49B
5.03B
6.52B
1.47B
5.03B
Statement of Cash Flow
Date:
Period:
19.40M
Differed Income Tax :
17.70M
Stock Based Compensation :
23.70M
Change in Working Capital :
- 1385500.00K
Accounts Receivables:
-
Other Working Capital:
21.64B
Other Non-Cash Items:
9.00M
Net Cash Provided by Operating Activities:
- 174100.00K
Investments in PP&E:
- 30900.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
12/31/21
2022
Q1
2.44B
-
2.44B
322.10M
18.20B
3.21B
24.17B
38.10M
163.50M
8.30M
-
137.60M
480.10M
827.60M
3.64B
25.00B
1.15B
5.26B
462.70M
218.20M
- 4090900.00K
2.53B
5.29B
1.16B
6.45B
-
8.99B
4.00M
14.71B
-
967.90M
December 31, 2021 at 12:00:00 AM
23.96B
15.68B
24.66B
-
10.55B
8.1B
-
4.40M
- 26500.00K
- 235200.00K
100.00K
- 336800.00K
- 80100.00K
80.00M
- 572000.00K
-
- 772600.00K
2.46B
3.24B
- 174100.00K
- 30900.00K
- 205000.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
DHI
2023
2024
2025
2026
2027
$79.45
$140.20
$155.26
$171.95
$190.42