Back to top

Analyst Blog

One of the leading home building and mortgage banking companies in the United States, NVR Inc recently acquired all the assets of Pittsburgh-based, Heartland Homes Inc. The acquisition will compliment the Ryan Home business of NVR in Pittsburgh and NVR will use the established Heartland Homes brand.

Heartland Homes Inc. is involved in pre selling homes and acquiring land and lots in the metropolitan area of Pittsburgh, Monongalia, West Virginia and in Raleigh, North Carolina. Heartland Homes closed 400 homes in fiscal 2012 and has 38 active communities. NVR will benefit from Heartland Home’s existing business as it will be an addition to NVR’s Ryan Homes segment. Ryan homes caters to first time and move up buyers in the Pittsburg housing market.   

The recent acquisition will expand NVR’s market share in Pittsburgh. The inclusion of the Heartland Homes brand will enable NVR to capitalize on the increasing housing demand. The rising demand for new homes has led to a favorable situation in the housing market, where inventory levels are dropping and prices are moving up. As such, more companies are investing in building new homes in order to meet the growing housing demand.

For instance, one of its peers, KB Home recently acquired lands for 100 luxury homes in the sought after community of Playa Vista in Westside, Los Angeles. Another of NVR’s peer, PulteGroup, Inc. plans to invest more than $1.0 billion in land development and acquisition.

Regarding NVR, we are positive about the company’s initiatives to constantly introduce new products, which we believe will help it to capitalize on the improving markets. However, we would prefer to stay on the sidelines as the housing market is still in the recovery stage and the macroeconomic parameters are showing slow growth trajectory.

NVR Inc. carries a Zacks #4 Rank (Sell). For the longer-term, we are maintaining our Neutral recommendation on NVR Inc.

 

Please login to Zacks.com or register to post a comment.