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This well-known homebuilder raised the quarterly dividend payout to 16 cents per share from 15 cents. The amount will be paid out on Jan 3, 2023, to shareholders of record as of Dec 14, 2022. Based on the stock’s closing price of $45.15 per share on Dec 1, 2022, it has a dividend yield of 1.33%.
This move highlights the company’s sound and stable financial position and its commitment to reward shareholders regularly. Addressing this shareholder-friendly move, PulteGroup’s president and CEO, Ryan Marshall, stated, “This action demonstrates our ongoing commitment to returning funds to our shareholders through dividends and share repurchase.”
Image Source: Zacks Investment Research
In the past six months, shares of the company have gained 11.7% compared with the Zacks Building Products - Home Builders industry’s 15.8% rise.
Since 2018, PulteGroup's board of directors adopted a regular quarterly cash dividend policy. It paid out cash dividends of $148.1 million, $135.1 million, $124.4 million and $108.5 million in 2021, 2020, 2019 and 2018, respectively. The trend continued in 2022 as well. In the first nine months of 2022, it provided cash dividends of $106.7 million. A solid capital allocation strategy — which is a testimony to the company’s stability amid the prevailing macro-economic woes — drives long-term sustainable growth and shareholders’ value.
PulteGroup is also highly active on the buyback front. In the first nine months of 2022, the company repurchased 21.8 million shares under the repurchase authorization for $974.7 million. At Sep 30, 2022, it had remaining authorization of $482.9 million shares.
Can PulteGroup Sustain Dividend Hikes?
The housing market is significantly affected by supply chain disruptions, intense inflationary pressure, affordability issues and a smaller bond-buying program. The federal government’s actions related to economic stimulus, taxation and borrowing limits could affect consumer confidence and spending levels.
The Federal Reserve’s (Fed) recent rate hike brings the central bank’s benchmark interest rate, the federal funds rate, to a new range of 3.0% to 3.25% — its highest level since 2008 — from a range between 2.25% and 2.5%. Officials expect the Fed funds rate to rise to 4.4% by the end of 2022 and 4.6% by the end of 2023.
This apart, PHM’s net new orders in the third-quarter 2022 declined 28% from a year ago. The decrease in orders reflects softer demand, resulting mainly from higher interest rates as the absorption pace fell to 2.0 homes per month, down from three homes per month for the same period last year. Also, it was impacted by a significant increase in cancelations. The cancelation rate for the third quarter was 24%, higher than the 10% in the year-ago period and 15% in the second quarter of 2022.
Despite these headwinds, PulteGroup has been banking on an accretive land acquisition strategy and focusing on growing demand for entry-level homes.
Zacks Rank & Key Picks
PHM currently carries a Zacks Rank #5 (Strong Sell).
CRH currently carries a Zacks Rank #2 (Buy). The firm manufactures cement, concrete products, aggregates, roofing, insulation and other building materials.
The company’s expected earnings growth rate for 2022 is 22.1%.
Headquartered in Temple, GA, Janus manufactures and supplies turn-key self-storage and commercial and industrial building solutions. Solid backlog levels, an impressive project pipeline, productivity improvements and commercial actions, including pricing, are expected to drive growth. The company is expected to benefit from its one-stop-shop offering with a leading market share position in self-storage doors and related design and installation services.
Janus’ earnings for 2022 are expected to rise 21%. It currently carries a Zacks Rank #2.
Acuity Brands currently sports a Zacks Rank #1. The company manufactures and distributes lighting fixtures and related components. It has been witnessing higher sales driven by product vitality in its lighting and spaces businesses, along with price increases and product and productivity improvements.
Acuity Brands has an estimated earnings growth rate of 4.1% for fiscal 2023.
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PulteGroup (PHM) Hikes Dividend by 7%, Lifts Shareholders Value
PulteGroup, Inc.’s (PHM - Free Report) stock inched up 0.83% on Dec 1, after it announced a hike of 6.7% in its quarterly cash dividend.
This well-known homebuilder raised the quarterly dividend payout to 16 cents per share from 15 cents. The amount will be paid out on Jan 3, 2023, to shareholders of record as of Dec 14, 2022. Based on the stock’s closing price of $45.15 per share on Dec 1, 2022, it has a dividend yield of 1.33%.
This move highlights the company’s sound and stable financial position and its commitment to reward shareholders regularly. Addressing this shareholder-friendly move, PulteGroup’s president and CEO, Ryan Marshall, stated, “This action demonstrates our ongoing commitment to returning funds to our shareholders through dividends and share repurchase.”
Image Source: Zacks Investment Research
In the past six months, shares of the company have gained 11.7% compared with the Zacks Building Products - Home Builders industry’s 15.8% rise.
Since 2018, PulteGroup's board of directors adopted a regular quarterly cash dividend policy. It paid out cash dividends of $148.1 million, $135.1 million, $124.4 million and $108.5 million in 2021, 2020, 2019 and 2018, respectively. The trend continued in 2022 as well. In the first nine months of 2022, it provided cash dividends of $106.7 million. A solid capital allocation strategy — which is a testimony to the company’s stability amid the prevailing macro-economic woes — drives long-term sustainable growth and shareholders’ value.
PulteGroup is also highly active on the buyback front. In the first nine months of 2022, the company repurchased 21.8 million shares under the repurchase authorization for $974.7 million. At Sep 30, 2022, it had remaining authorization of $482.9 million shares.
Can PulteGroup Sustain Dividend Hikes?
The housing market is significantly affected by supply chain disruptions, intense inflationary pressure, affordability issues and a smaller bond-buying program. The federal government’s actions related to economic stimulus, taxation and borrowing limits could affect consumer confidence and spending levels.
The Federal Reserve’s (Fed) recent rate hike brings the central bank’s benchmark interest rate, the federal funds rate, to a new range of 3.0% to 3.25% — its highest level since 2008 — from a range between 2.25% and 2.5%. Officials expect the Fed funds rate to rise to 4.4% by the end of 2022 and 4.6% by the end of 2023.
This apart, PHM’s net new orders in the third-quarter 2022 declined 28% from a year ago. The decrease in orders reflects softer demand, resulting mainly from higher interest rates as the absorption pace fell to 2.0 homes per month, down from three homes per month for the same period last year. Also, it was impacted by a significant increase in cancelations. The cancelation rate for the third quarter was 24%, higher than the 10% in the year-ago period and 15% in the second quarter of 2022.
Despite these headwinds, PulteGroup has been banking on an accretive land acquisition strategy and focusing on growing demand for entry-level homes.
Zacks Rank & Key Picks
PHM currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Construction sector are CRH plc (CRH - Free Report) , Janus International Group, Inc. (JBI - Free Report) and Acuity Brands Inc. (AYI - Free Report) .
CRH currently carries a Zacks Rank #2 (Buy). The firm manufactures cement, concrete products, aggregates, roofing, insulation and other building materials.
The company’s expected earnings growth rate for 2022 is 22.1%.
Headquartered in Temple, GA, Janus manufactures and supplies turn-key self-storage and commercial and industrial building solutions. Solid backlog levels, an impressive project pipeline, productivity improvements and commercial actions, including pricing, are expected to drive growth. The company is expected to benefit from its one-stop-shop offering with a leading market share position in self-storage doors and related design and installation services.
Janus’ earnings for 2022 are expected to rise 21%. It currently carries a Zacks Rank #2.
Acuity Brands currently sports a Zacks Rank #1. The company manufactures and distributes lighting fixtures and related components. It has been witnessing higher sales driven by product vitality in its lighting and spaces businesses, along with price increases and product and productivity improvements.
Acuity Brands has an estimated earnings growth rate of 4.1% for fiscal 2023.