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Here's How Much a $1000 Investment in Meritage Homes Made 10 Years Ago Would Be Worth Today

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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.

What if you'd invested in Meritage Homes (MTH - Free Report) ten years ago? It may not have been easy to hold on to MTH for all that time, but if you did, how much would your investment be worth today?

Meritage Homes' Business In-Depth

With that in mind, let's take a look at Meritage Homes' main business drivers.

Based in Scottsdale, AZ, Meritage Homes Corporation is one of the leading designers and builders of single-family homes.  The company primarily engages in building and selling single-family homes for entry-level, first-time, move-up, luxury and active adult buyers in historically high-growth regions of the United States.

On Dec 31, 1996, it acquired the homebuilding operations of its predecessor company through a merger. Since then, it have engaged in homebuilding and related activities and ceased to operate as a real estate investment trust. Meritage Homes operates as a holding company and has no independent assets or operations.

The company operates through two principal business segments: Homebuilding (which accounted for 99.6% of total 2022 revenues) and Financial Services (0.4%).

The Homebuilding segment engages in acquiring and developing land, constructing homes, marketing and selling these constructed homes, and providing warranty and customer services. The company has homebuilding operations in three regions, namely West, Central and East, across nine states - Arizona, California, Colorado, Texas, Florida, Georgia, North Carolina, South Carolina, and Tennessee.

Meritage Homes also operates Carefree Title Agency, Inc., a wholly-owned title company whose core business includes title insurance and closing/settlement services. Notably, the company’s Financial Services segment includes revenues and expenses from Carefree Title.

At the end of first-quarter 2023, the company actively sold homes in 278 communities.

Bottom Line

While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Meritage Homes ten years ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in June 2013 would be worth $2,974.17, or a 197.42% gain, as of June 13, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.

The S&P 500 rose 169.08% and the price of gold increased 36% over the same time frame in comparison.

Analysts are anticipating more upside for MTH.

Shares of Meritage Homes have outperformed its industry in the past six months. The company reported first-quarter 2023 results wherein earnings and total closing revenues surpassed the Zacks Consensus Estimate by 41% and 26.4%, respectively. The company is benefiting from the strategy of targeting entry-level and first-move-up buyers and is expected to boost performance over the long haul. It is also benefiting from its focus on increasing gross margin and maximizing profits on every sale. Also, its ample liquidity and a healthy balance sheet bode well. Although volatile mortgage rates, increased inflationary pressure and supply chain disruptions are headwinds, earnings estimates for 2023 have increased over the past 30 days, reflecting analysts’ optimism over the stock’s growth potential.

The stock is up 5.40% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 9 higher, for fiscal 2023. The consensus estimate has moved up as well.

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