D.R. Horton exceeds Q4 expectations, announces stock repurchase plan for 2024

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D.R. Horton exceeds Q4 expectations, announces stock repurchase plan for 2024

D.R. Horton Inc., the major home construction company, has reported a significant increase in stock value and outperformed Wall Street's profit and revenue forecasts for Q4. This led to a 2.2% rise in stock value on Tuesday, culminating in an overall 34.9% increase for the year 2023. In comparison, the S&P 500 saw a rise of only 13.5% over the same period.

Despite the challenges posed by inflation and higher mortgage rates, D.R. Horton experienced a 39% surge in net sales orders from Q4 of the previous year. The company also raised its quarterly dividend to 30 cents per share, further adding to investor confidence.

The Q4 net income reported was $1.5 billion or $4.45 per share, exceeding FactSet's consensus estimate of $3.94 per share. Revenue for the quarter rose by 9% to reach $10.5 billion. In addition, D.R. Horton ended the year with the lowest leverage in its history at 18.3%.

Looking ahead to 2024, D.R. Horton projects revenue between $36-$37 billion and has announced plans for a $1.5 billion stock repurchase in the same year. This comes at a time when many Americans consider it an unfavorable period to buy a house, presenting an interesting dynamic for the housing market and D.R. Horton's future performance.

InvestingPro Insights

Drawing from InvestingPro's real-time data and expert tips, D.R. Horton Inc. (DHI) presents an interesting investment prospect. The company's market cap stands at a robust $40.89 billion, with a low P/E ratio of 8.57, suggesting the stock may be undervalued. Over the last twelve months as of Q3 2023, DHI has seen a revenue growth of 8.28%, underlining its strong financial performance.

InvestingPro Tips indicate that DHI yields a high return on invested capital and has a history of maintaining dividend payments, having raised its dividend for 9 consecutive years. This aligns with the company's recent announcement of raising its quarterly dividend to 30 cents per share. Additionally, the company operates with a moderate level of debt and its liquid assets exceed short-term obligations, contributing to its financial stability.

InvestingPro offers numerous additional tips and in-depth data for DHI and other stocks. This valuable information can provide investors with a comprehensive understanding of a company's financial health and market position.

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