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KB Home (KBH) Cheers Investors With 25% Dividend Hike
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In a bid to reward shareholders, KB Home (KBH - Free Report) announced a 25% increase in its quarterly dividend and unveiled a new $1-billion share repurchase authorization. This replaces a previous authorization, which had $113.6 million remaining.
KB Home intends to continue its share repurchases in 2024 in an estimated range of $200-$400 million for the full year, including $50 million of share repurchases completed during the first quarter.
KBH increased its quarterly dividend to 25 cents per share (or $1 annually) from the previous payout of 20 cents (or 80 cents annually). The hiked dividend will be paid out on May 23, 2024, to shareholders on record as of May 9, 2024.
Based on the closing price of $60.41 per share on Apr 18, 2024, the stock has a dividend yield of 1.7%. KBH’s payout ratio is 11%, with a five-year dividend growth rate of 27.9%. The yield aligns with KB Home's long-standing target of about 1.5%.
Including the increase authorized by the Board in July 2023, the company has raised its quarterly dividend by 67% in the past nine months. Along with boosting shareholders’ returns, dividend hikes raise the market value of the stock. Companies often attract new investors and retain old ones through this strategy.
The company is focused on evolving into a larger and more profitable entity with a strong balance sheet and confidence in its ability to generate significant operating cash flow. It remains committed to its balanced approach, investing in growth while simultaneously returning a meaningful level of cash to stockholders.
What’s Driving the Dividend Policy?
KB Home has been pursuing a Returns-Focused Growth Plan that is designed to drive revenues and homebuilding operating income margin, return on invested capital, return on equity and leverage ratio. The plan’s main components are executing the company’s core business strategy, improving asset efficiency and monetizing significant deferred tax assets.
The company invests aggressively in land acquisition and development, mainly in high-end locations, which is critical for community count and top-line growth. This eventually helped the company reduce debt. It is optimistic that this blend of rising active inventory while reducing its annual interest incurred is expected to boost future gross margin and returns.
Image Source: Zacks Investment Research
Shares of the company have gained 48.9% compared with the Zacks Building Products - Home Builders industry’s 42.2% growth in the past year.
The positive trend is solidified by the upward movement of the fiscal 2024 earnings estimates to $8.01 per share from $7.59 per share in the past 30 days. KBH has also delivered a trailing four-quarter earnings surprise of 26.1%, on average.
Here are some other top-ranked stocks from the Zacks Construction sector:
Vulcan Materials Company (VMC - Free Report) currently flaunts a Zacks Rank of 1. VMC delivered a trailing four-quarter earnings surprise of 19.5%, on average. The stock has gained 27.6% in the past six months.
The Zacks Consensus Estimate for VMC’s 2024 sales and earnings per share (EPS) indicates an improvement of 1.4% and 20.4%, respectively, from a year ago.
Sterling Infrastructure, Inc. (STRL - Free Report) presently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 20.4%, on average. Shares of STRL have increased 41.7% in the past six months.
The Zacks Consensus Estimate for STRL’s 2024 sales and EPS indicates a rise of 11.7% and 11.4%, respectively, from the prior-year levels.
NVR, Inc. (NVR - Free Report) currently sports a Zacks Rank 1. NVR delivered a trailing four-quarter earnings surprise of 8.1%, on average. The stock has gained 42% in the past six months.
The Zacks Consensus Estimate for NVR’s 2024 sales and EPS indicates growth of 8.1% and 7.8%, respectively, from the prior-year levels.
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KB Home (KBH) Cheers Investors With 25% Dividend Hike
In a bid to reward shareholders, KB Home (KBH - Free Report) announced a 25% increase in its quarterly dividend and unveiled a new $1-billion share repurchase authorization. This replaces a previous authorization, which had $113.6 million remaining.
KB Home intends to continue its share repurchases in 2024 in an estimated range of $200-$400 million for the full year, including $50 million of share repurchases completed during the first quarter.
KBH increased its quarterly dividend to 25 cents per share (or $1 annually) from the previous payout of 20 cents (or 80 cents annually). The hiked dividend will be paid out on May 23, 2024, to shareholders on record as of May 9, 2024.
Based on the closing price of $60.41 per share on Apr 18, 2024, the stock has a dividend yield of 1.7%. KBH’s payout ratio is 11%, with a five-year dividend growth rate of 27.9%. The yield aligns with KB Home's long-standing target of about 1.5%.
Including the increase authorized by the Board in July 2023, the company has raised its quarterly dividend by 67% in the past nine months. Along with boosting shareholders’ returns, dividend hikes raise the market value of the stock. Companies often attract new investors and retain old ones through this strategy.
The company is focused on evolving into a larger and more profitable entity with a strong balance sheet and confidence in its ability to generate significant operating cash flow. It remains committed to its balanced approach, investing in growth while simultaneously returning a meaningful level of cash to stockholders.
What’s Driving the Dividend Policy?
KB Home has been pursuing a Returns-Focused Growth Plan that is designed to drive revenues and homebuilding operating income margin, return on invested capital, return on equity and leverage ratio. The plan’s main components are executing the company’s core business strategy, improving asset efficiency and monetizing significant deferred tax assets.
The company invests aggressively in land acquisition and development, mainly in high-end locations, which is critical for community count and top-line growth. This eventually helped the company reduce debt. It is optimistic that this blend of rising active inventory while reducing its annual interest incurred is expected to boost future gross margin and returns.
Image Source: Zacks Investment Research
Shares of the company have gained 48.9% compared with the Zacks Building Products - Home Builders industry’s 42.2% growth in the past year.
The positive trend is solidified by the upward movement of the fiscal 2024 earnings estimates to $8.01 per share from $7.59 per share in the past 30 days. KBH has also delivered a trailing four-quarter earnings surprise of 26.1%, on average.
Zacks Rank & Other Key Picks
KB Home currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are some other top-ranked stocks from the Zacks Construction sector:
Vulcan Materials Company (VMC - Free Report) currently flaunts a Zacks Rank of 1. VMC delivered a trailing four-quarter earnings surprise of 19.5%, on average. The stock has gained 27.6% in the past six months.
The Zacks Consensus Estimate for VMC’s 2024 sales and earnings per share (EPS) indicates an improvement of 1.4% and 20.4%, respectively, from a year ago.
Sterling Infrastructure, Inc. (STRL - Free Report) presently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 20.4%, on average. Shares of STRL have increased 41.7% in the past six months.
The Zacks Consensus Estimate for STRL’s 2024 sales and EPS indicates a rise of 11.7% and 11.4%, respectively, from the prior-year levels.
NVR, Inc. (NVR - Free Report) currently sports a Zacks Rank 1. NVR delivered a trailing four-quarter earnings surprise of 8.1%, on average. The stock has gained 42% in the past six months.
The Zacks Consensus Estimate for NVR’s 2024 sales and EPS indicates growth of 8.1% and 7.8%, respectively, from the prior-year levels.