Back to top

Image: Shutterstock

Dream Finders (DFH) Acquires Crescent Homes, Expands in SC & TN

Read MoreHide Full Article

Dream Finders Homes, Inc. (DFH - Free Report) acquired the core homebuilding assets, Crescent Homes, of a privately held homebuilder, Crescent Ventures, LLC.

The buyout will enhance DFH’s geographic footprint and help expand into the Charleston and Greenville, SC, and Nashville, TN, markets. The deal includes 457 homesites in different stages of construction, a sales order backlog of approximately 460 homes (worth nearly $265 million) and about 6,200 lots under control.

The company funded the transaction with cash on hand and borrowings under its existing senior unsecured revolving credit facility.

Founded in 2009 by Ted Terry, Crescent Homes builds single-family homes and has more than 25 active selling communities. It serves entry-level and first- and second-time move-up homebuyers. So far, it has closed approximately 5,000 homes.

Acquisitions Act as an Integral Part

This Jacksonville, FL-based homebuilder focuses mainly on accretive acquisitions. The company has been benefiting from its recent buyouts, which it has completed in the past few years. Apart from acquisitions, Dream Finders' growth strategy pivots around organic expansion plans, which help in additional margin expansion.

In October 2021, the company acquired the homebuilding, mortgage banking and title insurance assets of privately held Texas homebuilder McGuyer Homebuilders, Inc. This buyout came with a backlog of more than 1,845 homes with a value in excess of $1 billion with 5,500 lots under control, along with increased geographical reach.

In October 2020, it acquired H&H Constructors of Fayetteville, LLC, which extended its product offerings to the first-time and move-up market. Also, this expanded its geographical reach in high-growth markets, Raleigh and Charlotte.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Shares of this Zacks Rank #1 (Strong Buy) company have skyrocketed 161% in a year compared with the Zacks Building Products – Home Builders industry’s 57.2% growth, the Zacks Construction sector’s 34.8% rise and the S&P 500 Index’s 20.7% improvement.

This homebuilder has been gaining from the lack of existing house supply and improving housing demographics. Also, dealing affordability issues through its mortgage partner, Jet HomeLoans LLC., has contributed to its growth momentum despite uncertain macroeconomic conditions.

Adding to the analyst’s bullish sentiments, this new home construction company delivered a trailing four-quarter earnings surprise of 131.6%, on average. Earnings estimates for 2024 moved up to $2.81 per share from $2.62 per share in the past 60 days. This indicates a 12.2% year-over-year gain on 3.5% higher revenues.

Other Key Picks

Here are some other top-ranked stocks from the Zacks Construction sector:

Martin Marietta Materials, Inc. (MLM - Free Report) currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

MLM delivered a trailing four-quarter earnings surprise of 37.3%, on average. The Zacks Consensus Estimate for MLM’s 2024 sales and EPS indicates growth of 9.5% and 13.1%, respectively, from a year ago.

North American Construction Group Ltd. (NOA - Free Report) has a Zacks Rank #2 at present.

NOA surpassed earnings expectations in three of the trailing four quarters and missed on one occasion, the average surprise being 22.4%. The Zacks Consensus Estimate for NOA’s 2024 sales and EPS indicates growth of 44.1% and 51.7%, respectively, from a year ago.

Howmet Aerospace Inc. (HWM - Free Report) currently carries a Zacks Rank #2.

HWM surpassed earnings expectations in three of the trailing four quarters and met on one occasion, the average surprise being 5%. The Zacks Consensus Estimate for HWM’s 2024 sales and EPS indicates growth of 7.5% and 21.7%, respectively, from a year ago.

Published in