While the market may have closed for new public home builders over the past year, 2013's burst of activity introduced five new companies to the latest BIG BUILDER report card.
In 2014, it was good to be big. While many smaller private builders were struggling to secure both capital and land—the basic elements of growth in the business—the big were getting bigger. Whether they were looking for land or an entry point into new markets, the publics were aggressive.
But public growth wasn't measured in number of acquisitions. According to stats compiled by American New Homes Group president Jamie Pirrello and his team of Robert Yemola, Kylie Berrena, David DeFreest, and Christine Zoerner—members of the Accounting, Business, and Economics Department at Juniata College in Huntingdon, Pa.—the publics grew in a lot of other metrics in 2014.
On average, their home building revenue grew 20.5% in 2014, and their home building gross margins grew 80 basis points to an average of 19.8%. Pre-tax income shot up 45.2% to an average of $255 million in 2014.
Not surprisingly, sales also increased for the publics. Closings grew on average 9.4%, and new orders grew an average of 11.9% in 2014. Lots controlled grew by 11.7% to an average year's supply of lots of 9.6 years, which is up from 8.6 years in 2013. Active selling communities grew an average of 16.1%.
But not everything was positive for the public builders last year. Cash and marketable securities fell 25.4% during 2014 to an average of $301 million, and total shareholder return fell, on average, 8.3% in 2014.
For a deeper look into how the individual companies performed versus one another, check out the pages ahead. To create an apples-to-apples comparison of all the public home builders, Pirrello and his team mapped data from the four quarters closest to the calender year. We then ranked each builder in each category and added a bit of editorial discretion to arrive at the final report card grades.