We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
D.R. Horton (DHI - Free Report) , one of the biggest and well-known homebuilders in the nation, recently reported impressive fourth-quarter fiscal 2019 results. Both earnings and revenues beat the Zacks Consensus Estimate. The company’s shares have rallied 3.2% since the earnings release (as of Nov 13, 2019) (read: What Rising Rates? Technology to Aid Housing ETFs Ahead).
Let’s take a look inside the headline numbers:
Earnings came in at $1.35 per share in the quarter, surpassing the Zacks Consensus Estimate of $1.25 by 8%. The reported figure also increased 11% from the year-ago quarter’s $1.22 per share.
Total revenues (Homebuilding, Forestar and Financial Services) came in at $5.04 billion, up 11.7% year over year. The reported figure also topped the consensus mark of $4.84 billion.
Home sales also increased 9.6% year over year to $4.79 billion, aided by higher home deliveries. It recorded growth across regions, including the East, Midwest, Southeast, West and South Central. Net sales orders were up 14% year over year. Revenues from the Financial Services segment jumped 32.3%.
PulteGroup (PHM - Free Report) reported third-quarter earnings in late October, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate. The stock has gained 5.9% in the past month (as of Nov 14, 2019).
Earnings per share came in at $1.01, beating the consensus mark of 92 cents by 9.8%. The bottom line, however, was flat year over year. Total revenues of $2.71 billion outpaced the consensus mark of $2.6 billion by 4.1% and increased 2.3% from the year-ago figure of $2.65 billion.
Meritage Homes (MTH - Free Report) too released third-quarter results in late October. Earnings and revenues outpaced the Zacks Consensus Estimate on strong homebuying activity. Earnings of $1.79 per share trumped the consensus mark of $1.49 by 19.9%. Also, the reported figure improved 35% year over year, backed by home closing revenues, gross margins and greater overhead leverage. Home closing revenues amounted to $939.2 million, exceeding the consensus mark of $914 million by 2.3% and up 7% year over year.
Solid Zacks Ranks
The homebuilding industry belongs to a favorable Zacks industry (placed at the top 5% of 250+ industries). Most of the homebuilding stocks like DHI, PHM, MTH, KB Home (KBH - Free Report) and Lennar Corporation (LEN - Free Report) carry a Zacks #1 (Strong Buy) or #2 (Buy).
Housing ETFs mainly include SPDR S&P Homebuilders ETF (XHB - Free Report) , iShares U.S. Home Construction ETF (ITB - Free Report) and Hoya Capital Housing ETF (HOMZ - Free Report) .
DHI holds the first spot in the 45-stock ITB, with a 13.44% weight, and the third position in the 35-stock XHB, with 4.68% exposure. HOMZ has, however, small allocation of 1.65% to this stock. PulteGroup gets 7.35% of ITB, 4.7% of XHB and 1.6% of HOMZ.
In a nutshell, though home sales have been subdued in recent times, things in the homebuilding space are not as bad as feared. Upbeat earnings performance and solid Zacks ranks make housing ETFs compelling buys right now.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Bet Big on Housing Earnings With These ETFs
D.R. Horton (DHI - Free Report) , one of the biggest and well-known homebuilders in the nation, recently reported impressive fourth-quarter fiscal 2019 results. Both earnings and revenues beat the Zacks Consensus Estimate. The company’s shares have rallied 3.2% since the earnings release (as of Nov 13, 2019) (read: What Rising Rates? Technology to Aid Housing ETFs Ahead).
Let’s take a look inside the headline numbers:
Earnings came in at $1.35 per share in the quarter, surpassing the Zacks Consensus Estimate of $1.25 by 8%. The reported figure also increased 11% from the year-ago quarter’s $1.22 per share.
Total revenues (Homebuilding, Forestar and Financial Services) came in at $5.04 billion, up 11.7% year over year. The reported figure also topped the consensus mark of $4.84 billion.
Home sales also increased 9.6% year over year to $4.79 billion, aided by higher home deliveries. It recorded growth across regions, including the East, Midwest, Southeast, West and South Central. Net sales orders were up 14% year over year. Revenues from the Financial Services segment jumped 32.3%.
PulteGroup (PHM - Free Report) reported third-quarter earnings in late October, wherein earnings and revenues surpassed the respective Zacks Consensus Estimate. The stock has gained 5.9% in the past month (as of Nov 14, 2019).
Earnings per share came in at $1.01, beating the consensus mark of 92 cents by 9.8%. The bottom line, however, was flat year over year. Total revenues of $2.71 billion outpaced the consensus mark of $2.6 billion by 4.1% and increased 2.3% from the year-ago figure of $2.65 billion.
Meritage Homes (MTH - Free Report) too released third-quarter results in late October. Earnings and revenues outpaced the Zacks Consensus Estimate on strong homebuying activity. Earnings of $1.79 per share trumped the consensus mark of $1.49 by 19.9%. Also, the reported figure improved 35% year over year, backed by home closing revenues, gross margins and greater overhead leverage. Home closing revenues amounted to $939.2 million, exceeding the consensus mark of $914 million by 2.3% and up 7% year over year.
Solid Zacks Ranks
The homebuilding industry belongs to a favorable Zacks industry (placed at the top 5% of 250+ industries). Most of the homebuilding stocks like DHI, PHM, MTH, KB Home (KBH - Free Report) and Lennar Corporation (LEN - Free Report) carry a Zacks #1 (Strong Buy) or #2 (Buy).
Housing ETFs mainly include SPDR S&P Homebuilders ETF (XHB - Free Report) , iShares U.S. Home Construction ETF (ITB - Free Report) and Hoya Capital Housing ETF (HOMZ - Free Report) .
DHI holds the first spot in the 45-stock ITB, with a 13.44% weight, and the third position in the 35-stock XHB, with 4.68% exposure. HOMZ has, however, small allocation of 1.65% to this stock. PulteGroup gets 7.35% of ITB, 4.7% of XHB and 1.6% of HOMZ.
In a nutshell, though home sales have been subdued in recent times, things in the homebuilding space are not as bad as feared. Upbeat earnings performance and solid Zacks ranks make housing ETFs compelling buys right now.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>