Public home builders are rated by a variety of metrics: customer service scores, number of closings, revenue flow, and land positions to name a few. Our annual public builder report card aims to distill many different sets of data into one simple letter grade.
Each year, the report provides an “apples-to-apples” comparison of the performance of U.S. public home builders. To achieve this, we took all disclosed company data and mapped it to a calendar year.
We provide a strictly formulaic grade for each firm and rank them from first to last in four categories—financial, land, operations, and sales and marketing (these categorical breakdowns are reflected in each firm’s individual report cards, which appear online at builderonline.com). Each rank is then given a score. Scores are weighted and added together to produce a final rating. The financial category carries the most weight, worth 40% of the overall score; the other three categories are each worth 20%.
In past versions of this report card, firms were given credit for having more land on their books, but these days owning land isn’t necessarily positive. If a company owns too much land it could be exposed if the market turns. That’s why we look at “lots optioned to total controlled” instead of years supply of lots.
This year’s report card profiles 18 public companies, down one from last year thanks to Taylor Morrison’s acquisition of AV Homes. Overall, the group had a stellar year, with average total revenue growing by 21.6% to $5.2 billion compared with the year before.
Also of note, average pre-tax income rose by 31.8%, while average net income rose by 86.5%—a discrepancy that is partly the result of new tax laws that were enacted last year. Another effect of the tax change is that even though pre-tax income rose, the average tax expense fell by $58 million to $131 million or 23.8% of pre-tax income.
It’s important to point out that these grades are not to be taken as qualified evaluations of company financial management.
Our thanks goes out to the team that researched the filings and ranked and scored the firms. The group included Sean Cavanagh, Anthony Popolo, Hudson Speck, and Bethany Spencer, all students in the accounting, business and economics department at Juniata College in Huntingdon, Pa.
A Class Builders at a Glance
Builder
2018 Grade /
2017 Grade
EPS
Total Revenue(in millions)
Return onInvested Capital
Debt PerShare
Net Debt toTotal Cap
Equity PerBasic Share
NVR
A+/ A+
$194.80
$7,163.7
34.6%
$146.06
-3.8%
$441.98
D.R. Horton
A/ A+
$4.07
$16,254.3
13.6%
$7.36
16.7%
$24.45
Lennar Corp.
A/ B+
$5.44
$20,571.6
8.8%
$27.33
32.0%%
$44.97
PulteGroup
A/ A
$3.55
$10,188.3
13.6%
$10.63
24.4%
$16.91
Green Brick Partners
A/ B
$1.02
$623.6
8.1%
$3.95
23.0%
$9.57
LGI Homes
A-/ A
$6.24
$1,504.4
13.7%
$26.26
46.4%
$26.35
Toll Brothers
A-/ A
$4.87
$7,331.0
8.9%
$23.73
32.4%
$32.56
A Class Report Cards (Select to Expand)
A+/A+
2018 Performance Final Grade:
89.4/100
2017 Final Grade:
84.8/100
NVR Inc. (NYSE:NVR), Reston, Virginia, parent of Ryan Homes and NV Homes, posted net income for the year of $797,197,000, an increase of 48%. Diluted earnings per share for the year ended December 31, 2018 was $194.80, an increase of 54% from $126.77 per diluted share for 2017. Total SG&A as a percentage of revenue was 7.2%, lowest of all public home builders. Return on equity was 46.7%, highest among all public builders. NVR controls 99.700 lots, of which only 500 are owned and 99.200 are optioned, and it has more cash on balance sheet than total debt, the only public home builder in this position.
Total revenue (in millions):
$7,163.7
HB revenue (in millions):
$7,004.3
Debt per share:
$146.06
Equity per basic share:
$441.98
HB pretax margin:
12.4%
Backlog value (in millions):
$3,152.8
Inventory (in millions):
1,253.1
Lot supply (in years):
5.4
Financial 40.0/40
Net debt-to-capital:
-3.8%
Pretax home building income (in millions):
$871,106
Total SG&A/Total revenue:
7.2%
Total SG&A (in millions):
11.3%
Return on invested capital:
34.6%
Return on equity:
46.7%
Total shareholder return:
-31.0%
EPS:
53.7%
Land 17.2/20
Community count:
-1.6%
Share of lots optioned to total controlled:
99.5%
Operations 14.4/20
Home building gross margins:
18.7%
Sales per month to break even (per community):
1.0
Revenue per employee (in millions):
$1,279
Sales and Marketing 17.8/20
Closings:
15.6%
Sales velocity (per community per month):
3.2
Unit backlog:
-1.9%
A/A+
2018 Performance Final Grade:
84.4/100
2017 Final Grade:
84.3/100
D.R. Horton (NYSE:DHI), Arlington, Texas, posted strong results for its fiscal year, which ended Sept. 30. It was thus shielded, earnings wise, from part of the industrywide downturn that took place in the second half. The company posted 12% growth in total revenue to $16.3 billion, gross margin grew by 90 basis points to 22.7%, return on equity grew to 18.3% and the total number of lots controlled grew by 19.3%.
Total revenue (in millions):
$16,254.3
HB revenue (in millions):
$15,728.1
Debt per share:
$7.36
Equity per basic share:
$24.45
HB pretax margin:
12.2%
Backlog value (in millions):
$4,036.3
Inventory (in millions):
11,595.6
Lot supply (in years):
5.9
Financial 35.6/40
Net debt-to-capital:
16.7%
Pretax home building income (in millions):
$1,937,700
Total SG&A/Total revenue:
10.4%
Total SG&A (in millions):
10.8%
Return on invested capital:
13.6%
Return on equity:
18.3%
Total shareholder return:
-31.1%
EPS:
51.4%
Land 18.9/20
Community count:
-
Share of lots optioned to total controlled:
58.5%
Operations 17.8/20
Home building gross margins:
20.8%
Sales per month to break even (per community):
-
Revenue per employee (in millions):
$1,927
Sales and Marketing 12.2/20
Closings:
11.5%
Sales velocity (per community per month):
-
Unit backlog:
10.3%
A/B+
2018 Performance Final Grade:
84.4/100
2017 Final Grade:
78.1/100
Lennar Corporation (NYSE:LEN), Miami, spent the year digesting and integrating Cal Atlantic Homes while zeroing in on its core business—home building. It spun off its Rialto Management Group as part of that effort. Largely a result of the CalAtlantic merger, total revenue rose to $20.6 billion, the highest among all public builders, pre-tax profit was $2.3 billion, the highest among all public builders, its active community count rose to 1,329. Home building debt-to-capital fell to 36.9% from 44.9%.
Total revenue (in millions):
$20,571.6
HB revenue (in millions):
$18,810.6
Debt per share:
$27.33
Equity per basic share:
$44.97
HB pretax margin:
11.8%
Backlog value (in millions):
$6,570.1
Inventory (in millions):
17,068.7
Lot supply (in years):
5.7
Financial 34.4/40
Net debt-to-capital:
32.0%
Pretax home building income (in millions):
$2,254,650
Total SG&A/Total revenue:
12.8%
Total SG&A (in millions):
37.4%
Return on invested capital:
8.8%
Return on equity:
15.1%
Total shareholder return:
-19.8%
EPS:
60.9%
Land 15.0/20
Community count:
73.7%
Share of lots optioned to total controlled:
22.7%
Operations 16.7/20
Home building gross margins:
19.7%
Sales per month to break even (per community):
1.6
Revenue per employee (in millions):
$1,769
Sales and Marketing 18.3/20
Closings:
55.2%
Sales velocity (per community per month):
2.9
Unit backlog:
74.8%
A/A
2018 Performance Final Grade:
83.3/100
2017 Final Grade:
81.4/100
PulteGroup, Inc. (NYSE:PHM), Atlanta, made significant progress in the wake of a board shakeup and a CEO change in 2016. Gross Margin increased 160 basis points to 24.7%, net income grew by 128.5%, earnings per share grew by 148.5% and return on equity grew to 22.8% from 10.1%. It ended the year with $1.1 billion in cash after investing $2.6 billion to support the ongoing success of the business and returning almost $400 million to shareholders in 2018. Its debt-to-total capitalization ratio was 39%, down from 42% at the end of 2017.
Total revenue (in millions):
$10,188.3
HB revenue (in millions):
$9,818.4
Debt per share:
$10.63
Equity per basic share:
$16.91
HB pretax margin:
13.1%
Backlog value (in millions):
$3,836.1
Inventory (in millions):
7,253.4
Lot supply (in years):
6.5
Financial 37.8/40
Net debt-to-capital:
24.4%
Pretax home building income (in millions):
$1,303,429
Total SG&A/Total revenue:
11.4%
Total SG&A (in millions):
14.7%
Return on invested capital:
13.6%
Return on equity:
22.8%
Total shareholder return:
-21.2%
EPS:
146.5%
Land 12.8/20
Community count:
3.2%
Share of lots optioned to total controlled:
40.1%
Operations 19.4/20
Home building gross margins:
23.2%
Sales per month to break even (per community):
1.0
Revenue per employee (in millions):
$2,003
Sales and Marketing 13.3/20
Closings:
9.8%
Sales velocity (per community per month):
2.3
Unit backlog:
-3.0%
A/B
2018 Performance Final Grade:
82.8/100
2017 Final Grade:
74.3/100
Green Brick Partners (NASDAQ: GRBK), Plano, Texas is considered by some analysts to be among the best run companies in the business. Why? Total revenue grew by 36.1%, total SG&A, as a percent of revenue, was 9.1%, lowest among all public builders. Its backlog value was up 74.5%, and its metric of .71 units to break even per month per community is the lowest among all public builders. Its net debt to total capitalization ratio was 26%, one of the lowest among all the publics.
Total revenue (in millions):
$623.6
HB revenue (in millions):
$578.9
Debt per share:
$3.95
Equity per basic share:
$9.57
HB pretax margin:
11.5%
Backlog value (in millions):
$264.3
Inventory (in millions):
669.0
Lot supply (in years):
6.3
Financial 31.1/40
Net debt-to-capital:
23.0%
Pretax home building income (in millions):
$71,807
Total SG&A/Total revenue:
9.1%
Total SG&A (in millions):
45.7%
Return on invested capital:
8.1%
Return on equity:
11.2%
Total shareholder return:
-36.2%
EPS:
240.0%
Land 15.6/20
Community count:
38.2%
Share of lots optioned to total controlled:
22.8%
Operations 18.9/20
Home building gross margins:
20.9%
Sales per month to break even (per community):
0.7
Revenue per employee (in millions):
$1,599
Sales and Marketing 17.2/20
Closings:
30.0%
Sales velocity (per community per month):
1.5
Unit backlog:
87.7%
A-/A
2018 Performance Final Grade:
80.0/100
2017 Final Grade:
81.9/100
LGI Homes Inc. (Nasdaq:LGIH), The Woodlands, Texas, finished the year with a record-breaking 6,512 homes closed. Total revenue was up 19.6%, return on equity rose to 27.1%, second best among all public builders, total shareholder return, though down 7.4% in the Fed-induced second-half slowdown, was the best among all public builders. LGI has a 7.9-year supply of controlled lots, the highest among all public builders.
Total revenue (in millions):
$1,504.4
HB revenue (in millions):
$1,504.4
Debt per share:
$26.26
Equity per basic share:
$26.35
HB pretax margin:
13.2%
Backlog value (in millions):
$156.1
Inventory (in millions):
1,228.3
Lot supply (in years):
7.9
Financial 32.2/40
Net debt-to-capital:
46.4%
Pretax home building income (in millions):
$199,098
Total SG&A/Total revenue:
12.0%
Total SG&A (in millions):
19.4%
Return on invested capital:
13.7%
Return on equity:
27.1%
Total shareholder return:
-7.4%
EPS:
31.9%
Land 17.8/20
Community count:
10.3%
Share of lots optioned to total controlled:
44.4%
Operations 14.4/20
Home building gross margins:
25.3%
Sales per month to break even (per community):
3.3
Revenue per employee (in millions):
$1,755
Sales and Marketing 15.6/20
Closings:
11.4%
Sales velocity (per community per month):
6.5
Unit backlog:
-23.5%
A-/A
2018 Performance Final Grade:
80.0/100
2017 Final Grade:
82.4/100
Toll Brothers, Inc (NYSE:TOL), Horsham, Pa. produced the highest revenues, contract value, and earnings per share in its 51-year history in 2018. In addition, net income, home deliveries, contracts (in units) and year-end backlog (in dollars and units) were the highest in more than a decade. Total Revenue grew by 20.8%, but new orders fell by 4.7%. It took 1.04 units to break even per month per community, second lowest among all public builders. And total SG&A as a percentage of revenue was 9.4%, fourth lowest among all public builders.
Total revenue (in millions):
$7,331.0
HB revenue (in millions):
$7,287.1
Debt per share:
$23.73
Equity per basic share:
$32.56
HB pretax margin:
11.3%
Backlog value (in millions):
$5,366.7
Inventory (in millions):
7,714.6
Lot supply (in years):
6.5
Financial 35.6/40
Net debt-to-capital:
32.4%
Pretax home building income (in millions):
$826,940
Total SG&A/Total revenue:
9.4%
Total SG&A (in millions):
10.1%
Return on invested capital:
8.9%
Return on equity:
15.7%
Total shareholder return:
-29.8%
EPS:
34.1%
Land 13.9/20
Community count:
7.5%
Share of lots optioned to total controlled:
38.0%
Operations 17.2/20
Home building gross margins:
20.7%
Sales per month to break even (per community):
1.0
Revenue per employee (in millions):
$1,496
Sales and Marketing 13.3/20
Closings:
13.4%
Sales velocity (per community per month):
2.1
Unit backlog:
-4.7%
B Class Builders at a Glance
Builder
2018 Grade /
2017 Grade
EPS
Total Revenue(in millions)
Return onInvested Capital
Debt PerShare
Net Debt toTotal Cap
Equity PerBasic Share
MDC
B+/ C+
$3.66
$3,065.2
8.5%
$0.02
22.8%
$0.03
William Lyon Homes
B+/ C+
$2.32
$2,087.2
4.3%
$33.52
55.1%
$21.90
Meritage Homes
B/ C+
$5.58
$3,528.6
7.7%
$32.18
33.0%
$42.25
M/I Homes
B/ B-
$3.70
$2,286.3
7.4%
$22.89
42.4%
$29.31
Tri Pointe Group
B/ A
$1.81
$3,262.7
7.9%
$0.01
32.7%
$0.01
B Class Report Cards (Select to Expand)
B+/C+
2018 Performance Final Grade:
78.9/100
2017 Final Grade:
69.0/100
M.D.C Holdings, Inc. (NYSE: MDC), Denver, parent of Richmond American Homes, spent the year moving its price point downward to spur demand, and it worked, even though the average selling price of homes delivered rose 4% to $469,900. Total revenue grew 18.9%, and gross margin increased 150 basis points to 20.5%. Richmond American had only a 3.7-year supply of controlled lots, lowest of all public builders. And total shareholder return fell 10.2%, second best among all public builders.
Total revenue (in millions):
$3,065.2
HB revenue (in millions):
$2,981.8
Debt per share:
$0.02
Equity per basic share:
$0.03
HB pretax margin:
7.3%
Backlog value (in millions):
$1,426.0
Inventory (in millions):
2,133.0
Lot supply (in years):
3.7
Financial 34.4/40
Net debt-to-capital:
22.8%
Pretax home building income (in millions):
$217,494
Total SG&A/Total revenue:
12.0%
Total SG&A (in millions):
14.3%
Return on invested capital:
8.5%
Return on equity:
14.1%
Total shareholder return:
-10.2%
EPS:
47.6%
Land 12.8/20
Community count:
9.9%
Share of lots optioned to total controlled:
29.7%
Operations 15.6/20
Home building gross margins:
18.3%
Sales per month to break even (per community):
2.0
Revenue per employee (in millions):
$1,939
Sales and Marketing 16.1/20
Closings:
11.8%
Sales velocity (per community per month):
3.0
Unit backlog:
-7.1%
B+/C+
2018 Performance Final Grade:
77.8/100
2017 Final Grade:
68.6/100
William Lyon Homes (NYSE:WLH), Newport Beach, California reported a record-setting year as it delivered 4,186 homes, up 29%, and achieved home building revenues of $2.1 billion, up 16%, both the highest in the company’s history. This was due in part to the strategic acquisition of RSI Communities for $460 million in the first quarter, which gave WLH additional exposure to the first-time home buyer segment and expanding its footprint into Central Texas. Revenue per employee of $2.4 million, was highest among public builders, but total shareholder return fell by 63.2%, second worst among public builders.
Total revenue (in millions):
$2,087.2
HB revenue (in millions):
$2,081.7
Debt per share:
$33.52
Equity per basic share:
$21.90
HB pretax margin:
6.9%
Backlog value (in millions):
$479.0
Inventory (in millions):
2,333.2
Lot supply (in years):
7.1
Financial 23.3/40
Net debt-to-capital:
55.1%
Pretax home building income (in millions):
$144,656
Total SG&A/Total revenue:
11.2%
Total SG&A (in millions):
32.5%
Return on invested capital:
4.3%
Return on equity:
11.1%
Total shareholder return:
-63.2%
EPS:
87.1%
Land 18.3/20
Community count:
26.2%
Share of lots optioned to total controlled:
40.3%
Operations 17.2/20
Home building gross margins:
18.2%
Sales per month to break even (per community):
2.3
Revenue per employee (in millions):
$2,399
Sales and Marketing 18.9/20
Closings:
29.2%
Sales velocity (per community per month):
3.2
Unit backlog:
26.6%
B/C+
2018 Performance Final Grade:
74.4/100
2017 Final Grade:
67.6/100
Meritage Homes Corporation (NYSE: MTH), Scottsdale, posted net earnings of $227.3 million ($5.58 per diluted share) for the year 2018 compared to $143.3 million ($3.41 per diluted share) in 2017, a 58.7% increase in net and a 63.6% increase in earnings per share. Gross Margin increased 40 basis points to 18.3%, and revenue per employee grew to $2.2. million, fourth best among all public builders. A 9% increase in home closing revenue over 2017 was due to an 11% increase in volume, partially offset by a 1% decrease in average closing price due to an intentional shift toward more entry-level communities with higher absorptions.
Total revenue (in millions):
$3,528.6
HB revenue (in millions):
$3,474.7
Debt per share:
$32.18
Equity per basic share:
$42.25
HB pretax margin:
7.1%
Backlog value (in millions):
$1,015.9
Inventory (in millions):
2,742.6
Lot supply (in years):
4.1
Financial 31.1/40
Net debt-to-capital:
33.0%
Pretax home building income (in millions):
$247,993
Total SG&A/Total revenue:
11.0%
Total SG&A (in millions):
10.0%
Return on invested capital:
7.7%
Return on equity:
13.8%
Total shareholder return:
-30.1%
EPS:
63.6%
Land 16.1/20
Community count:
11.5%
Share of lots optioned to total controlled:
30.5%
Operations 16.1/20
Home building gross margins:
17.9%
Sales per month to break even (per community):
1.7
Revenue per employee (in millions):
$2,185
Sales and Marketing 11.1/20
Closings:
10.7%
Sales velocity (per community per month):
2.5
Unit backlog:
-15.4%
B/B-
2018 Performance Final Grade:
73.9/100
2017 Final Grade:
71.0/100
M/I Homes Inc. (NYSE:MHO), Columbus, Ohio posted record levels of revenue, homes delivered, and new contracts, along with a 17% increase in pre-tax income and a 49.4% increase in net income. Total revenue was up 16.5%, and earnings per share rose 63.7%. The company’s home building debt to capital ratio at year-end was 44%. To boot, 51% of controlled lots are optioned, the fourth highest among all public builders. Shareholders’ equity reached an all-time record of $855 million, a 14% increase from a year earlier.
Total revenue (in millions):
$2,286.3
HB revenue (in millions):
$2,217.2
Debt per share:
$22.89
Equity per basic share:
$29.31
HB pretax margin:
6.1%
Backlog value (in millions):
$896.7
Inventory (in millions):
1,674.5
Lot supply (in years):
5.0
Financial 26.7/40
Net debt-to-capital:
42.4%
Pretax home building income (in millions):
$135,679
Total SG&A/Total revenue:
12.3%
Total SG&A (in millions):
10.2%
Return on invested capital:
7.4%
Return on equity:
13.4%
Total shareholder return:
-40.1%
EPS:
63.7%
Land 18.3/20
Community count:
11.2%
Share of lots optioned to total controlled:
51.0%
Operations 12.2/20
Home building gross margins:
17.5%
Sales per month to break even (per community):
1.6
Revenue per employee (in millions):
$1,682
Sales and Marketing 16.7/20
Closings:
13.5%
Sales velocity (per community per month):
2.3
Unit backlog:
8.9%
B/A
2018 Performance Final Grade:
72.8/100
2017 Final Grade:
80.0/100
TRI Pointe Group (NYSE:TPH), Irvine, California had a record-setting year, delivering more than 5,000 homes for the first time in company history and recording net income in excess of $270 million. It also established a presence in two new markets - Dallas and the Carolinas. It ended the year with a net debt to net capital ratio of 35.5%. Additionally, it generated revenue per employee of $2.3 million, second highest among public builders and its average sales price of closed homes increased 10.0%, highest among all public builders.
Total revenue (in millions):
$3,262.7
HB revenue (in millions):
$3,244.1
Debt per share:
$0.01
Equity per basic share:
$0.01
HB pretax margin:
10.7%
Backlog value (in millions):
$897.3
Inventory (in millions):
3,216.1
Lot supply (in years):
5.5
Financial 30.0/40
Net debt-to-capital:
32.7%
Pretax home building income (in millions):
$347,402
Total SG&A/Total revenue:
10.5%
Total SG&A (in millions):
24.6%
Return on invested capital:
7.9%
Return on equity:
13.5%
Total shareholder return:
-39.8%
EPS:
49.6%
Land 11.7/40
Community count:
12.3%
Share of lots optioned to total controlled:
16.9%
Operations 19.4/20
Home building gross margins:
21.2%
Sales per month to break even (per community):
1.5
Revenue per employee (in millions):
$2,274
Sales and Marketing 11.7/20
Closings:
8.0%
Sales velocity (per community per month):
2.7
Unit backlog:
-15.0%
C Class Builders at a Glance
Builder
2018 Grade /
2017 Grade
EPS
Total Revenue(in millions)
Return onInvested Capital
Debt PerShare
Net Debt toTotal Cap
Equity PerBasic Share
The New Home Company
C+/ B-
$(0.69)
$667.6
-2.3%
$18.72
55.0%
$11.59
Century Communities
C+/ B-
$3.17
$2,147.4
5.7%
$32.49
51.7%
$28.28
Taylor Morrison Homes
C/ B-
$1.83
$4,227.4
5.0%
$18.06
38.9%
$20.98
KB Home
C/ B
$1.71
$4,547.0
4.1%
$20.39
35.8%
$20.66
Hovnanian Enterprises
C/ C-
$0.12
$1,954.7
1.7%
$10.17
134.2%
$(3.16)
Beazer Homes
C-/ C-
$2.69
$2,136.7
4.6%
$39.18
61.9%
$19.81
C Class Report Cards (Select to Expand)
C+/B-
2018 Performance Final Grade:
67.8/100
2017 Final Grade:
71.0/100
The New Home Company, Inc. (NYSE:NWHM), Aliso Viejo, California, took another step forward in implementing its strategy to reach more buyers through more affordably priced communities as evidenced by a 46% increase in deliveries compared to 2017 and a 38% reduction in the average selling price of homes delivered. Still, it was not profitable. Revenue fell by 11.1%, posted a net loss for the year, and saw its debt to total capital ratio climb to 61.8%. But its gross margin increased by 160 basis points to 24.7%.
Total revenue (in millions):
$667.6
HB revenue (in millions):
$504.0
Debt per share:
$18.72
Equity per basic share:
$11.59
HB pretax margin:
-4.9%
Backlog value (in millions):
$207.1
Inventory (in millions):
566.3
Lot supply (in years):
5.6
Financial 21.1/40
Net debt-to-capital:
55.0%
Pretax home building income (in millions):
$(24,706)
Total SG&A/Total revenue:
9.3%
Total SG&A (in millions):
5.1%
Return on invested capital:
-2.3%
Return on equity:
-5.6%
Total shareholder return:
-49.4%
EPS:
-184.1%
Land 17.8/20
Community count:
17.6%
Share of lots optioned to total controlled:
40.7%
Operations 11.7/20
Home building gross margins:
11.4%
Sales per month to break even (per community):
2.4
Revenue per employee (in millions):
$2,073
Sales and Marketing 17.2/20
Closings:
46.0%
Sales velocity (per community per month):
2.2
Unit backlog:
24.8%
C+/B-
2018 Performance Final Grade:
67.2/100
2017 Final Grade:
72.4/100
Century Communities Inc. (NYSE:CCS), Greenwood Village, Colorado, completed the acquisition of Wade Jurney Homes in 2018, and it drove operating metrics. Total revenue grew 50.8%, 2nd highest among public builders, on an increase in closings of 67.6%. Earnings per share grew by 56.2%. Average closing sales price fell by 10.4%, the second largest drop among public builders, and sales per community grew to 3.9 per month from 2.7.
Total revenue (in millions):
$2,147.4
HB revenue (in millions):
$2,110.1
Debt per share:
$32.49
Equity per basic share:
$28.28
HB pretax margin:
5.0%
Backlog value (in millions):
$669.5
Inventory (in millions):
1,848.2
Lot supply (in years):
5.0
Financial 22.2/40
Net debt-to-capital:
51.7%
Pretax home building income (in millions):
$106,257
Total SG&A/Total revenue:
13.4%
Total SG&A (in millions):
55.1%
Return on invested capital:
5.7%
Return on equity:
12.1%
Total shareholder return:
-44.5%
EPS:
56.2%
Land 14.4/20
Community count:
2.5%
Share of lots optioned to total controlled:
48.8%
Operations 10.6/20
Home building gross margins:
17.5%
Sales per month to break even (per community):
3.0
Revenue per employee (in millions):
$1,546
Sales and Marketing 20.0/20
Closings:
67.6%
Sales velocity (per community per month):
3.9
Unit backlog:
65.2%
C/B-
2018 Performance Final Grade:
66.7/100
2017 Final Grade:
71.0/100
Taylor Morrison Home Corporation (NYSE: TMHC), Scottsdale, had two major items on its agenda last year. One was the digestion of AV Homes, which was acquired several months before the close of the year. The other was the unwinding of its operations in Canada and the corporate reorganization that resulted from both. Partially as a result of the AV Homes acquisition, gross margin fell by 150 basis points to 17.5%, net income increased by 126.6%, and debt to total capital increased to 41.9%. Lots under control increased by 50.3%.
Total revenue (in millions):
$4,227.4
HB revenue (in millions):
$4,115.2
Debt per share:
$18.06
Equity per basic share:
$20.98
HB pretax margin:
7.1%
Backlog value (in millions):
$2,079.6
Inventory (in millions):
3,980.6
Lot supply (in years):
6.5
Financial 27.8/40
Net debt-to-capital:
38.9%
Pretax home building income (in millions):
$297,018
Total SG&A/Total revenue:
9.9%
Total SG&A (in millions):
6.8%
Return on invested capital:
5.0%
Return on equity:
10.3%
Total shareholder return:
-36.3%
EPS:
24.5%
Land 11.1/20
Community count:
3.4%
Share of lots optioned to total controlled:
23.2%
Operations 12.8/20
Home building gross margins:
17.1%
Sales per month to break even (per community):
1.4
Revenue per employee (in millions):
$1,838
Sales and Marketing 15.0/20
Closings:
9.1%
Sales velocity (per community per month):
2.3
Unit backlog:
18.9%
C/B
2018 Performance Final Grade:
65.6/100
2017 Final Grade:
74.3/100
KB Home, Inc. (NYSE:KBH), Los Angeles made progress during the year in digging itself further out of debt, having retired $264.6 million in notes. Gross margin increased 120 basis points to 17.7%, revenue per employee rose to nearly $2.3 million, third highest among all public builders and total debt to capital fell under 50% to 49.7%. But backlog value fell 13.6%, and the company still owes more than $2 billion.
Total revenue (in millions):
$4,547.0
HB revenue (in millions):
$4,533.8
Debt per share:
$20.39
Equity per basic share:
$20.66
HB pretax margin:
7.7%
Backlog value (in millions):
$1,434.4
Inventory (in millions):
3,582.8
Lot supply (in years):
4.7
Financial 27.8/40
Net debt-to-capital:
35.8%
Pretax home building income (in millions):
$351,301
Total SG&A/Total revenue:
9.9%
Total SG&A (in millions):
4.2%
Return on invested capital:
4.1%
Return on equity:
8.5%
Total shareholder return:
-40.4%
EPS:
-7.6%
Land 10.6/20
Community count:
-4.3%
Share of lots optioned to total controlled:
26.4%
Operations 12.8/20
Home building gross margins:
17.4%
Sales per month to break even (per community):
2.3
Revenue per employee (in millions):
$2,268
Sales and Marketing 14.4/20
Closings:
3.7%
Sales velocity (per community per month):
4.1
Unit backlog:
-6.9%
C/C-
2018 Performance Final Grade:
65.0/100
2017 Final Grade:
57.1/100
Hovnanian Enterprises, (NYSE:HOV) Matawan, N.J. is slowly moving to extricate itself from the debt it incurred during the housing downturn. It received a notice that its stock was in danger of delisting on the NYSE toward yearend; in 2019, it engineered a reverse stock split that kept its shares on the exchange. Still, for the fiscal year, even though total revenue fell by 15.6%, total gross margin rose 180 basis points to 17.9% and pre-tax, the company turned to a profit from a loss.
Total revenue (in millions):
$1,954.7
HB revenue (in millions):
$1,866.8
Debt per share:
$10.17
Equity per basic share:
$(3.16)
HB pretax margin:
5.3%
Backlog value (in millions):
$749.8
Inventory (in millions):
1,178.4
Lot supply (in years):
6.3
Financial 25.6/40
Net debt-to-capital:
134.2%
Pretax home building income (in millions):
$100,258
Total SG&A/Total revenue:
13.4%
Total SG&A (in millions):
-10.2%
Return on invested capital:
1.7%
Return on equity:
3.7%
Total shareholder return:
-79.5%
EPS:
104.8%
Land 14.4/20
Community count:
-2.1%
Share of lots optioned to total controlled:
57.6%
Operations 12.8/20
Home building gross margins:
18.8%
Sales per month to break even (per community):
1.3
Revenue per employee (in millions):
$1,056
Sales and Marketing 12.2/20
Closings:
-10.3%
Sales velocity (per community per month):
2.8
Unit backlog:
-10.5%
C-/C-
2018 Performance Final Grade:
57.8/100
2017 Final Grade:
55.7/100
Beazer Homes Inc. (NYSE:BZH), Atlanta, ended the year on a decidedly more positive note: It swung from a net loss in the 2018 report cards to net income in 2019 and posted a 187% increase in earnings per share. Still, new orders were down 29%, and debt to total capital was still high at 66.4%. Beazer started 2019 with a Q1 loss and took impairments on all its to-be-developed land holdings in California.
