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Lennar (LEN) Lures Investors Via 50% Quarterly Dividend Hike
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Lennar Corporation (LEN - Free Report) announced a hike in dividend payout, maintaining its commitment of increasing stockholder returns. This hike is reflective of the homebuilder’s focus on operational excellence, land strategy and cash flow.
The company increased its quarterly dividend by 50% to 37.5 cents per share ($1.50 annually) from 25 cents ($1.00 annually). This new dividend, approved by the board of directors, will be paid on Feb 10, 2022 to its stockholders of record as of Jan 27. The dividend yield, based on the latest payout and Jan 12 closing market price, is approximately 1.39%.
Shares of this major homebuilder gained 0.19% during the trading session on Jan 12 and 3.24% in the after-hours trading session on the same day.
What’s Driving the Dividend Policy?
Lennar’s business has been benefiting from solid demand for new homes, reflective of healthy housing market fundamentals stemming from the strengthening job market. Also, the expected rise in mortgage rates is driving sales for new homes in the market.
Last month, Lennar reported strong fourth-quarter fiscal 2021 results. The company’s quarterly earnings surpassed the Zacks Consensus Estimate by 5.3% and jumped 55% from the year-ago profit level. This marked the 11th consecutive quarter of an earnings beat. The upside was mainly driven by higher deliveries and continued operating leverage, backed by technological efforts.
Although revenues missed the consensus mark, thanks to unprecedented supply chain challenges, the same grew 23.6% year over year, given higher deliveries and pricing.
Importantly, Lennar ended fiscal 2021 with $2.74 billion of homebuilding cash and cash equivalents (up from $2.7 billion at fiscal 2020-end). That said, it has no outstanding borrowing under the $2.5-billion revolving credit facility. Hence, LEN has total homebuilding liquidity of approximately $5.2 billion. Additionally, the company ended the quarter with a homebuilding debt to capital of 18.3%, down from 24.9% at fiscal 2021-end. This is the lowest debt-to-capital ratio Lennar has ever achieved.
Meanwhile, a glimpse of Lennar’s price performance reveals that it has outperformed the industry in the past year. The stock has gained 43.9% compared with the industry’s 28.6% rally in the said period. Also, it has outperformed the S&P 500’s 25% rise in the said period.
Image Source: Zacks Investment Research
Earnings estimates for fiscal 2022 have moved 4% upward over the past 30 days to $15.60 per share, depicting analysts’ optimism over the company’s prospects.
Toll Brothers Inc. (TOL - Free Report) currently sports a Zacks Rank #1. This Horsham, PA-based luxury homebuilder builds single-family detached and attached home communities; master-planned luxury residential resort-style golf communities; and urban low, mid, and high-rise communities, principally on the land it develops and improves. It has been benefiting from the strategy of broadening product lines, price points and geographies.
Toll Brothers’ earnings for fiscal 2022 are expected to rise 46.3% year over year.
D.R. Horton (DHI - Free Report) currently carries a Zacks Rank #2 (Buy). This Texas-based prime homebuilder continues to gain from industry-leading market share, a solid acquisition strategy, a well-stocked supply of land, lots, and homes along with affordable product offerings across multiple brands.
D.R. Horton’s earnings are expected to rise 27.7% year over year in fiscal 2022.
Meritage Homes Corporation (MTH - Free Report) currently carries a Zacks Rank #2. Its successful execution of strategic initiatives to boost profitability and focus on entry-level LiVE.NOW homes bode well.
Meritage Homes’ earnings are expected to rise 23.4% year over year in 2022.
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Lennar (LEN) Lures Investors Via 50% Quarterly Dividend Hike
Lennar Corporation (LEN - Free Report) announced a hike in dividend payout, maintaining its commitment of increasing stockholder returns. This hike is reflective of the homebuilder’s focus on operational excellence, land strategy and cash flow.
The company increased its quarterly dividend by 50% to 37.5 cents per share ($1.50 annually) from 25 cents ($1.00 annually). This new dividend, approved by the board of directors, will be paid on Feb 10, 2022 to its stockholders of record as of Jan 27. The dividend yield, based on the latest payout and Jan 12 closing market price, is approximately 1.39%.
Shares of this major homebuilder gained 0.19% during the trading session on Jan 12 and 3.24% in the after-hours trading session on the same day.
What’s Driving the Dividend Policy?
Lennar’s business has been benefiting from solid demand for new homes, reflective of healthy housing market fundamentals stemming from the strengthening job market. Also, the expected rise in mortgage rates is driving sales for new homes in the market.
Last month, Lennar reported strong fourth-quarter fiscal 2021 results. The company’s quarterly earnings surpassed the Zacks Consensus Estimate by 5.3% and jumped 55% from the year-ago profit level. This marked the 11th consecutive quarter of an earnings beat. The upside was mainly driven by higher deliveries and continued operating leverage, backed by technological efforts.
Although revenues missed the consensus mark, thanks to unprecedented supply chain challenges, the same grew 23.6% year over year, given higher deliveries and pricing.
Importantly, Lennar ended fiscal 2021 with $2.74 billion of homebuilding cash and cash equivalents (up from $2.7 billion at fiscal 2020-end). That said, it has no outstanding borrowing under the $2.5-billion revolving credit facility. Hence, LEN has total homebuilding liquidity of approximately $5.2 billion. Additionally, the company ended the quarter with a homebuilding debt to capital of 18.3%, down from 24.9% at fiscal 2021-end. This is the lowest debt-to-capital ratio Lennar has ever achieved.
Meanwhile, a glimpse of Lennar’s price performance reveals that it has outperformed the industry in the past year. The stock has gained 43.9% compared with the industry’s 28.6% rally in the said period. Also, it has outperformed the S&P 500’s 25% rise in the said period.
Earnings estimates for fiscal 2022 have moved 4% upward over the past 30 days to $15.60 per share, depicting analysts’ optimism over the company’s prospects.
Zacks Rank
Currently, Lennar carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Top-Ranked Stocks From the Same Space
Toll Brothers Inc. (TOL - Free Report) currently sports a Zacks Rank #1. This Horsham, PA-based luxury homebuilder builds single-family detached and attached home communities; master-planned luxury residential resort-style golf communities; and urban low, mid, and high-rise communities, principally on the land it develops and improves. It has been benefiting from the strategy of broadening product lines, price points and geographies.
Toll Brothers’ earnings for fiscal 2022 are expected to rise 46.3% year over year.
D.R. Horton (DHI - Free Report) currently carries a Zacks Rank #2 (Buy). This Texas-based prime homebuilder continues to gain from industry-leading market share, a solid acquisition strategy, a well-stocked supply of land, lots, and homes along with affordable product offerings across multiple brands.
D.R. Horton’s earnings are expected to rise 27.7% year over year in fiscal 2022.
Meritage Homes Corporation (MTH - Free Report) currently carries a Zacks Rank #2. Its successful execution of strategic initiatives to boost profitability and focus on entry-level LiVE.NOW homes bode well.
Meritage Homes’ earnings are expected to rise 23.4% year over year in 2022.