D.R. Horton: Growing Market Share In A (Temporarily) Declining Market

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Investment Thesis

D.R. Horton, Inc. (NYSE:DHI) is a leader in the homebuilding market with no signs of slowing down in growing market share. It has consistently improved profitability and grown earnings since 2014. I sought to

D.R. Horton Investor Presentation

Created by Author using FRED Economic Data from the St. Louis Fed and the Author’s projections

Created by Author using FRED Economic Data from the St. Louis Fed

Created by Author using data from DHI investor relations documents and the Author’s projections

Year

Median House Price

DHI Average Selling Price

% of Median Price

2016

$306,500.00

$292,300.00

95%

2017

$321,633.33

$298,400.00

93%

2018

$323,125.00

$298,800.00

92%

2019

$319,266.67

$297,800.00

93%

2020

$334,991.67

$300,900.00

90%

2021

$393,966.67

$323,300.00

82%

2022

$445,333.33

$385,100.00

86%

Average:

90%

Year

Revenue (in millions)

Net Income (in millions)

% of Revenue

2014

$8,024.00

$533.50

6.6%

2015

$10,824.00

$750.70

6.9%

2016

$12,157.40

$886.30

7.3%

2017

$14,091.00

$1,038.40

7.4%

2018

$16,068.00

$1,460.30

9.1%

2019

$17,592.90

$1,618.50

9.2%

2020

$20,311.10

$2,373.70

11.7%

2021

$27,774.20

$4,175.80

15.0%

2022

$33,480.00

$5,857.50

17.5%

Created by Author using data from Macrotrends.net and the Author’s projections

Created by Author using data from Macrotrends.net and Yahoo Finance

Year

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

2041

2042

2043

2044

2045

2046

2047

2048

2049

2050

2051

2052

2053

2054

2055

2056

2057

2058

2059

2060

2061

2062

2063

2064

2065

2066

2067

2068

2069

2070

2071

2072

Houses Sold (thousands)

374

321

306

368

430

440

503

561

615

614

683

831

769

658

400

450

500

550

600

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

650

DHI Market Share

4.46%

6.50%

5.45%

5.13%

5.62%

6.51%

7.23%

7.19%

7.44%

8.45%

8.28%

9.44%

10.62%

12.58%

12.20%

12.89%

13.54%

14.14%

14.70%

15.22%

15.69%

16.11%

16.48%

16.82%

17.12%

17.38%

17.61%

17.81%

17.98%

18.13%

18.27%

18.38%

18.48%

18.56%

18.63%

18.69%

18.75%

18.79%

18.83%

18.86%

18.89%

18.92%

18.94%

18.96%

18.97%

18.98%

19.00%

19.00%

19.01%

19.02%

19.03%

19.03%

19.03%

19.04%

19.04%

19.04%

19.05%

19.05%

19.05%

19.05%

19.05%

19.05%

19.05%

19.05%

DHI Selling Price

$ 213,400.00

$ 206,100.00

$ 212,200.00

$ 223,300.00

$ 249,400.00

$ 272,200.00

$ 285,700.00

$ 292,300.00

$ 298,400.00

$ 298,800.00

$ 297,800.00

$ 300,900.00

$ 323,300.00

$ 385,100.00

$ 360,703.98

$ 364,161.57

$ 367,619.17

$ 371,076.76

$ 374,534.35

$ 377,991.94

$ 381,449.54

$ 384,907.13

$ 388,364.72

$ 391,822.32

$ 395,279.91

$ 398,737.50

$ 402,195.10

$ 405,652.69

$ 409,110.28

$ 412,567.87

$ 416,025.47

$ 419,483.06

$ 422,940.65

$ 426,398.25

$ 429,855.84

$ 433,313.43

$ 436,771.02

$ 440,228.62

$ 443,686.21

$ 447,143.80

$ 450,601.40

$ 454,058.99

$ 457,516.58

$ 460,974.17

$ 464,431.77

$ 467,889.36

$ 471,346.95

$ 474,804.55

$ 478,262.14

$ 481,719.73

$ 485,177.33

$ 488,634.92

$ 492,092.51

$ 495,550.10

$ 499,007.70

$ 502,465.29

$ 505,922.88

$ 509,380.48

$ 512,838.07

$ 516,295.66

$ 519,753.25

$ 523,210.85

$ 526,668.44

$ 530,126.03

Revenue from Closed Sales (millions)

$ 3,564.42

$ 4,302.34

$ 3,542.68

$ 4,217.02

$ 6,024.26

$ 7,803.97

$ 10,384.62

$ 11,782.32

$ 13,652.10

$ 15,494.87

$ 16,845.06

$ 23,608.01

$ 26,411.99

$ 31,864.71

$ 17,608.57

$ 21,122.78

$ 24,883.50

$ 28,865.71

$ 33,043.34

$ 37,390.60

$ 38,891.39

$ 40,298.50

$ 41,613.41

$ 42,839.43

$ 43,981.19

$ 45,044.21

$ 46,034.56

$ 46,958.53

$ 47,822.40

$ 48,632.26

$ 49,393.90

$ 50,112.74

$ 50,793.75

$ 51,441.47

$ 52,059.99

$ 52,652.99

$ 53,223.72

$ 53,775.07

$ 54,309.60

$ 54,829.52

$ 55,336.81

$ 55,833.16

$ 56,320.07

$ 56,798.82

$ 57,270.53

$ 57,736.17

$ 58,196.59

$ 58,652.50

$ 59,104.54

$ 59,553.25

$ 59,999.08

$ 60,442.45

$ 60,883.70

$ 61,323.12

$ 61,760.98

$ 62,197.50

$ 62,632.85

$ 63,067.21

$ 63,500.72

$ 63,933.50

$ 64,365.64

$ 64,797.25

$ 65,228.39

$ 65,659.14

Earnings Per Share

$ (1.73)

$ 0.77

$ 0.23

$ 2.77

$ 1.33

$ 1.50

$ 2.03

$ 2.36

$ 2.74

$ 3.81

$ 4.29

$ 6.41

$ 11.41

$ 16.51

$ 7.55

$ 9.05

$ 10.66

$ 12.37

$ 14.16

$ 16.02

$ 16.67

$ 17.27

$ 17.83

$ 18.36

$ 18.85

$ 19.30

$ 19.73

$ 20.13

$ 20.50

$ 20.84

$ 21.17

$ 21.48

$ 21.77

$ 22.05

$ 22.31

$ 22.57

$ 22.81

$ 23.05

$ 23.28

$ 23.50

$ 23.72

$ 23.93

$ 24.14

$ 24.34

$ 24.54

$ 24.74

$ 24.94

$ 25.14

$ 25.33

$ 25.52

$ 25.71

$ 25.90

$ 26.09

$ 26.28

$ 26.47

$ 26.66

$ 26.84

$ 27.03

$ 27.21

$ 27.40

$ 27.59

$ 27.77

$ 27.96

$ 28.14

Discounted EPS (7% Discount Rate)

$ 7.55

$ 8.46

$ 9.31

$ 10.10

$ 10.80

$ 11.43

$ 11.11

$ 10.76

$ 10.38

$ 9.99

$ 9.58

$ 9.17

$ 8.76

$ 8.35

$ 7.95

$ 7.55

$ 7.17

$ 6.80

$ 6.44

$ 6.10

$ 5.77

$ 5.45

$ 5.15

$ 4.86

$ 4.59

$ 4.33

$ 4.08

$ 3.85

$ 3.63

$ 3.42

$ 3.22

$ 3.04

$ 2.86

$ 2.70

$ 2.54

$ 2.39

$ 2.25

$ 2.12

$ 1.99

$ 1.88

$ 1.77

$ 1.66

$ 1.57

$ 1.47

$ 1.39

$ 1.30

$ 1.23

$ 1.15

$ 1.09

$ 1.02

Created by Author using data from Macrotrends.net and Yahoo Finance