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If You Invested $1000 in D.R. Horton 10 Years Ago, This Is How Much You'd Have Now
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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in D.R. Horton (DHI - Free Report) ten years ago? It may not have been easy to hold on to DHI for all that time, but if you did, how much would your investment be worth today?
D.R. Horton's Business In-Depth
With that in mind, let's take a look at D.R. Horton's main business drivers.
D.R. Horton, Inc., based in Texas, is one of the leading national homebuilders, primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets. D.R. Horton’s operations are spread across 104 markets in 32 states in the East, Midwest, Southeast, South Central, Southwest and West regions of the United States. Its houses are sold under the brand names D.R. Horton - America’s Builder, Emerald Homes, Express Homes and Freedom Homes.
D.R. Horton’s reporting segments are as follows: Homebuilding (contributing 95.7% to total revenues in fiscal 2021), Forestar (4.8%), Financial Services (2.9%) and Rental (1%). Of the total revenues, 4.4% represents the elimination of intercompany transactions & Other. The Homebuilding segment comprises six reporting regions and derives revenues primarily from the sale of completed homes built on lots it develops and on finished lots purchased ready for home construction. In addition to single-family detached homes (accounting for around 90% of home sale revenues), the segment builds attached homes, such as town homes, duplexes, triplexes and condominiums. The segment also derives revenues by selling lands and lots.
As of Mar 31, 2022, the Forestar land development reporting segment operated in 53 markets and 23 states, where it owns — directly or through joint ventures — interests in residential and mixed-use projects. Forestar Group Inc. (FOR), a publicly-traded residential and real estate development company, is a majority-owned subsidiary of D.R. Horton. On Dec 31, 2021, D.R. Horton owned 63% of Forestar’s outstanding common stock.
The Financial Services segment, through the mortgage subsidiary, DHI Mortgage, provides mortgage financing and title agency services primarily to the company’s homebuilding customers.
The Rental segment includes its single-family and multi-family rental operations. Meanwhile, the company remains engaged in other business activities through subsidiaries, through which it conducts insurance-related operations and owns non-residential real estate. These operations are grouped together and presented as other.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in D.R. Horton a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in May 2012 would be worth $4,396.24, or a gain of 339.62%, as of May 30, 2022, and this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 215.54% and the price of gold went up 13.78% over the same time frame.
Analysts are forecasting more upside for DHI too.
D.R. Horton reported solid second-quarter fiscal 2022 results. Earnings and revenues handily beat the Zacks Consensus Estimate, and increased 59% and 24.1% year over year, respectively. Quarterly deliveries (in value), pretax margin and orders (in value) grew 21.5%, 520 basis points and 14.6%, respectively. DHI’s upbeat view for its 2022 revenues is also encouraging. The uptick is expected to continue, courtesy of its industry-leading market share, solid acquisition strategy, well-stocked supply of land, lots and homes along with affordable product offerings across multiple brands. Yet, continued supply-chain issues, material cost inflation and higher wages are concerns for DHI’s margins. Also, interest rate hikes, soaring inflation and a smaller bond-buying program point to higher mortgage rates in 2022.
The stock has jumped 7.46% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 18 higher, for fiscal 2022; the consensus estimate has moved up as well.
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If You Invested $1000 in D.R. Horton 10 Years Ago, This Is How Much You'd Have Now
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in D.R. Horton (DHI - Free Report) ten years ago? It may not have been easy to hold on to DHI for all that time, but if you did, how much would your investment be worth today?
D.R. Horton's Business In-Depth
With that in mind, let's take a look at D.R. Horton's main business drivers.
D.R. Horton, Inc., based in Texas, is one of the leading national homebuilders, primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets. D.R. Horton’s operations are spread across 104 markets in 32 states in the East, Midwest, Southeast, South Central, Southwest and West regions of the United States. Its houses are sold under the brand names D.R. Horton - America’s Builder, Emerald Homes, Express Homes and Freedom Homes.
D.R. Horton’s reporting segments are as follows: Homebuilding (contributing 95.7% to total revenues in fiscal 2021), Forestar (4.8%), Financial Services (2.9%) and Rental (1%). Of the total revenues, 4.4% represents the elimination of intercompany transactions & Other. The Homebuilding segment comprises six reporting regions and derives revenues primarily from the sale of completed homes built on lots it develops and on finished lots purchased ready for home construction. In addition to single-family detached homes (accounting for around 90% of home sale revenues), the segment builds attached homes, such as town homes, duplexes, triplexes and condominiums. The segment also derives revenues by selling lands and lots.
As of Mar 31, 2022, the Forestar land development reporting segment operated in 53 markets and 23 states, where it owns — directly or through joint ventures — interests in residential and mixed-use projects. Forestar Group Inc. (FOR), a publicly-traded residential and real estate development company, is a majority-owned subsidiary of D.R. Horton. On Dec 31, 2021, D.R. Horton owned 63% of Forestar’s outstanding common stock.
The Financial Services segment, through the mortgage subsidiary, DHI Mortgage, provides mortgage financing and title agency services primarily to the company’s homebuilding customers.
The Rental segment includes its single-family and multi-family rental operations. Meanwhile, the company remains engaged in other business activities through subsidiaries, through which it conducts insurance-related operations and owns non-residential real estate. These operations are grouped together and presented as other.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in D.R. Horton a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in May 2012 would be worth $4,396.24, or a gain of 339.62%, as of May 30, 2022, and this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 215.54% and the price of gold went up 13.78% over the same time frame.
Analysts are forecasting more upside for DHI too.
D.R. Horton reported solid second-quarter fiscal 2022 results. Earnings and revenues handily beat the Zacks Consensus Estimate, and increased 59% and 24.1% year over year, respectively. Quarterly deliveries (in value), pretax margin and orders (in value) grew 21.5%, 520 basis points and 14.6%, respectively. DHI’s upbeat view for its 2022 revenues is also encouraging. The uptick is expected to continue, courtesy of its industry-leading market share, solid acquisition strategy, well-stocked supply of land, lots and homes along with affordable product offerings across multiple brands. Yet, continued supply-chain issues, material cost inflation and higher wages are concerns for DHI’s margins. Also, interest rate hikes, soaring inflation and a smaller bond-buying program point to higher mortgage rates in 2022.
The stock has jumped 7.46% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 18 higher, for fiscal 2022; the consensus estimate has moved up as well.