D.R. Horton (NYSE:DHI) Shares Gap Down After Earnings Miss

D.R. Horton, Inc. (NYSE:DHI) gapped down prior to trading on Tuesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $180.38, but opened at $153.19. D.R. Horton shares last traded at $156.20, with a volume of 1,921,070 shares trading hands.

The construction company reported $3.92 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $4.20 by ($0.28). D.R. Horton had a return on equity of 20.72% and a net margin of 13.36%. The company had revenue of $10 billion for the quarter, compared to the consensus estimate of $10.22 billion. During the same period last year, the company earned $4.45 EPS. D.R. Horton’s revenue for the quarter was down 4.7% compared to the same quarter last year.

D.R. Horton Increases Dividend

The company also recently disclosed a quarterly dividend, which will be paid on Tuesday, November 19th. Stockholders of record on Tuesday, November 12th will be issued a dividend of $0.40 per share. This is an increase from D.R. Horton’s previous quarterly dividend of $0.30. The ex-dividend date is Tuesday, November 12th. This represents a $1.60 annualized dividend and a dividend yield of 0.95%. D.R. Horton’s payout ratio is currently 8.17%.

D.R. Horton declared that its Board of Directors has initiated a share repurchase program on Thursday, July 18th that permits the company to repurchase $4.00 billion in outstanding shares. This repurchase authorization permits the construction company to purchase up to 6.9% of its stock through open market purchases. Stock repurchase programs are generally an indication that the company’s leadership believes its shares are undervalued.

Wall Street Analysts Forecast Growth

Several research analysts have weighed in on DHI shares. JMP Securities upped their price objective on shares of D.R. Horton from $170.00 to $210.00 and gave the stock a “market outperform” rating in a report on Friday, July 19th. Wedbush raised shares of D.R. Horton from an “underperform” rating to a “neutral” rating and set a $165.00 price target on the stock in a research report on Tuesday, October 15th. Keefe, Bruyette & Woods lifted their price target on D.R. Horton from $178.00 to $208.00 and gave the company an “outperform” rating in a research note on Tuesday, July 23rd. Royal Bank of Canada lowered their price objective on D.R. Horton from $154.00 to $145.00 and set an “underperform” rating for the company in a research note on Wednesday. Finally, Bank of America lifted their target price on D.R. Horton from $196.00 to $215.00 and gave the company a “buy” rating in a research report on Thursday, September 19th. One investment analyst has rated the stock with a sell rating, six have given a hold rating and ten have issued a buy rating to the company. According to data from MarketBeat.com, D.R. Horton has an average rating of “Moderate Buy” and an average price target of $185.87.

Hedge Funds Weigh In On D.R. Horton

A number of hedge funds and other institutional investors have recently made changes to their positions in DHI. TCI Wealth Advisors Inc. raised its position in D.R. Horton by 4.1% in the third quarter. TCI Wealth Advisors Inc. now owns 1,487 shares of the construction company’s stock worth $284,000 after acquiring an additional 58 shares during the period. Premier Path Wealth Partners LLC raised its holdings in shares of D.R. Horton by 1.0% in the 2nd quarter. Premier Path Wealth Partners LLC now owns 6,186 shares of the construction company’s stock worth $872,000 after purchasing an additional 59 shares during the period. Coldstream Capital Management Inc. lifted its stake in D.R. Horton by 1.2% in the second quarter. Coldstream Capital Management Inc. now owns 5,245 shares of the construction company’s stock valued at $739,000 after purchasing an additional 60 shares during the last quarter. Whittier Trust Co. grew its holdings in D.R. Horton by 1.7% during the second quarter. Whittier Trust Co. now owns 3,693 shares of the construction company’s stock valued at $520,000 after purchasing an additional 63 shares during the period. Finally, Values First Advisors Inc. increased its position in D.R. Horton by 0.7% in the second quarter. Values First Advisors Inc. now owns 8,878 shares of the construction company’s stock worth $1,251,000 after buying an additional 66 shares during the last quarter. 90.63% of the stock is owned by hedge funds and other institutional investors.

D.R. Horton Stock Performance

The company has a debt-to-equity ratio of 0.23, a current ratio of 7.22 and a quick ratio of 1.30. The company has a 50 day simple moving average of $187.29 and a 200-day simple moving average of $165.15. The stock has a market capitalization of $55.75 billion, a P/E ratio of 11.52, a price-to-earnings-growth ratio of 0.78 and a beta of 1.72.

About D.R. Horton

D.R. Horton, Inc operates as a homebuilding company in East, North, Southeast, South Central, Southwest, and Northwest regions in the United States. It engages in the acquisition and development of land; and construction and sale of residential homes in 118 markets across 33 states under the names of D.R.