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Here's How Much You'd Have If You Invested $1000 in KB Home a Decade Ago
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How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
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 KB Home (KBH - Free Report) ten years ago? It may not have been easy to hold on to KBH for all that time, but if you did, how much would your investment be worth today?
KB Home's Business In-Depth
With that in mind, let's take a look at KB Home's main business drivers.
Based in Los Angeles, CA, KB Home is a well-known homebuilder in the United States and one of the largest in the state. The company’s revenues are generated from Homebuilding (accounting for 99.5% of fiscal 2023 total revenues) and Financial Services (0.5%) operations.
The company’s Homebuilding operations include building and designing homes that cater to first-time, move-up and active adult homebuyers on acquired or developed lands. KB Home also builds attached and detached single-family homes, town homes and condominiums.
There are four main reportable segments within the homebuilding reporting segment based on geographical presence: West Coast (comprising Washington, California and Idaho), Southwest (comprising Arizona and Nevada), Central (constituting Colorado and Texas) and Southeast (including Florida and North Carolina).
KB Home’s Financial Services operations offer mortgage banking, title and insurance services to homebuyers. This segment earns revenues mainly from insurance commissions and the provision of title services.
The company ended the second quarter of fiscal 2024 with $643.5 million of cash and cash equivalents compared with $727.1 million in the fiscal 2023 end. The company has a total liquidity of $1.73 billion, including $1.08 billion of available capacity under the unsecured revolving credit facility, with no outstanding cash borrowings.
It had a debt to capital of 29.8%, down 90 basis points (bps) from 30.7% in the fiscal 2023. The company has no debt maturities until its 2026 term loan expiration and senior note maturity in June 2027.
In April 2024, the management approved an increase in the quarterly cash dividend to 25 cents from 20 cents per share. The board also authorized the repurchase of up to $1 billion of the company’s outstanding common stock, replacing a prior authorization.
During the fiscal second quarter, the company also repurchased 764,742 shares of its outstanding common stock for $50 million. As of Mar 31, 2024, it had $950 million remaining under its current common stock repurchase authorization.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in KB Home ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in July 2014 would be worth $4,197.38, or a 319.74% gain, as of July 12, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 183.83% and gold's return of 73.36% over the same time frame.
Analysts are anticipating more upside for KBH.
KB Home reported impressive results in second-quarter fiscal 2024 (ended May 31, 2024). Earnings and revenues beat the Zacks Consensus Estimate by 20.8% and 4.3%, respectively. Earnings increased on a year-over-year basis amid a revenue decline. Despite the volatility caused by rising mortgage rates, KB Home saw strong demand for personalized homes, leading to a higher mix of built-to-order sales. This was reflected in the 1.5% year-over-year increase in net orders. With a healthy backlog and balanced production, the company is on track to meet its revenue projection this year. Shares of KB Home have outperformed its industry in the year-to-date period. However, high mortgage rates, higher construction and development costs, marketing and advertising expenses and labor inflation are concerning.
Over the past four weeks, shares have rallied 6.22%, and there have been 6 higher earnings estimate revisions in the past two months for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.
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Here's How Much You'd Have If You Invested $1000 in KB Home a Decade Ago
How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
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 KB Home (KBH - Free Report) ten years ago? It may not have been easy to hold on to KBH for all that time, but if you did, how much would your investment be worth today?
KB Home's Business In-Depth
With that in mind, let's take a look at KB Home's main business drivers.
Based in Los Angeles, CA, KB Home is a well-known homebuilder in the United States and one of the largest in the state. The company’s revenues are generated from Homebuilding (accounting for 99.5% of fiscal 2023 total revenues) and Financial Services (0.5%) operations.
The company’s Homebuilding operations include building and designing homes that cater to first-time, move-up and active adult homebuyers on acquired or developed lands. KB Home also builds attached and detached single-family homes, town homes and condominiums.
There are four main reportable segments within the homebuilding reporting segment based on geographical presence: West Coast (comprising Washington, California and Idaho), Southwest (comprising Arizona and Nevada), Central (constituting Colorado and Texas) and Southeast (including Florida and North Carolina).
KB Home’s Financial Services operations offer mortgage banking, title and insurance services to homebuyers. This segment earns revenues mainly from insurance commissions and the provision of title services.
The company ended the second quarter of fiscal 2024 with $643.5 million of cash and cash equivalents compared with $727.1 million in the fiscal 2023 end. The company has a total liquidity of $1.73 billion, including $1.08 billion of available capacity under the unsecured revolving credit facility, with no outstanding cash borrowings.
It had a debt to capital of 29.8%, down 90 basis points (bps) from 30.7% in the fiscal 2023. The company has no debt maturities until its 2026 term loan expiration and senior note maturity in June 2027.
In April 2024, the management approved an increase in the quarterly cash dividend to 25 cents from 20 cents per share. The board also authorized the repurchase of up to $1 billion of the company’s outstanding common stock, replacing a prior authorization.
During the fiscal second quarter, the company also repurchased 764,742 shares of its outstanding common stock for $50 million. As of Mar 31, 2024, it had $950 million remaining under its current common stock repurchase authorization.
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in KB Home ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in July 2014 would be worth $4,197.38, or a 319.74% gain, as of July 12, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 183.83% and gold's return of 73.36% over the same time frame.
Analysts are anticipating more upside for KBH.
KB Home reported impressive results in second-quarter fiscal 2024 (ended May 31, 2024). Earnings and revenues beat the Zacks Consensus Estimate by 20.8% and 4.3%, respectively. Earnings increased on a year-over-year basis amid a revenue decline. Despite the volatility caused by rising mortgage rates, KB Home saw strong demand for personalized homes, leading to a higher mix of built-to-order sales. This was reflected in the 1.5% year-over-year increase in net orders. With a healthy backlog and balanced production, the company is on track to meet its revenue projection this year. Shares of KB Home have outperformed its industry in the year-to-date period. However, high mortgage rates, higher construction and development costs, marketing and advertising expenses and labor inflation are concerning.
Over the past four weeks, shares have rallied 6.22%, and there have been 6 higher earnings estimate revisions in the past two months for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.