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Here's How Much a $1000 Investment in KB Home Made 10 Years Ago Would Be Worth Today
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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and 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 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 $4,827.67, or a gain of 382.77%, as of July 29, 2024, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 175.94% and gold's return of 76.22% over the same time frame.
Analysts are forecasting more upside for KBH too.
Shares of KB Homes have outperformed its industry in the past year. The company is benefiting from its Build-to-Order approach, strong pricing strategy and reduced cancellation rates. Also, focus on land buyout initiatives bode well. During the second quarter of fiscal 2024, KB Home saw a 1.5% year-over-year increase in net orders to 3,997 units, thanks to improved demand conditions and a lower cancellation rate. Owing to a healthy backlog and balanced production, the company has raised its full year housing revenues expectation. Although high mortgage rates, higher construction and development costs, marketing and advertising expenses and labor inflation are concerning, earnings estimates for fiscal 2024 have increased in the past 30 days. This depicts analysts' optimism over the stock's growth potential.
The stock is up 19.35% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 6 higher, for fiscal 2024. The consensus estimate has moved up as well.
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Here's How Much a $1000 Investment in KB Home Made 10 Years Ago Would Be Worth Today
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and 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 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 $4,827.67, or a gain of 382.77%, as of July 29, 2024, and this return excludes dividends but includes price increases.
Compare this to the S&P 500's rally of 175.94% and gold's return of 76.22% over the same time frame.
Analysts are forecasting more upside for KBH too.
Shares of KB Homes have outperformed its industry in the past year. The company is benefiting from its Build-to-Order approach, strong pricing strategy and reduced cancellation rates. Also, focus on land buyout initiatives bode well. During the second quarter of fiscal 2024, KB Home saw a 1.5% year-over-year increase in net orders to 3,997 units, thanks to improved demand conditions and a lower cancellation rate. Owing to a healthy backlog and balanced production, the company has raised its full year housing revenues expectation. Although high mortgage rates, higher construction and development costs, marketing and advertising expenses and labor inflation are concerning, earnings estimates for fiscal 2024 have increased in the past 30 days. This depicts analysts' optimism over the stock's growth potential.
The stock is up 19.35% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 6 higher, for fiscal 2024. The consensus estimate has moved up as well.