Reviewing KB Home (KBH)’s and D.R. Horton Inc. (NYSE:DHI)’s results

KB Home (NYSE:KBH) and D.R. Horton Inc. (NYSE:DHI) have been rivals in the Residential Construction for quite some time. Below is a review of each business including various aspects such as institutional ownership, earnings and valuation, profitability, risk, dividends, analyst recommendations.

Earnings and Valuation

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KB Home 35 1.62 78.42M 2.67 9.83
D.R. Horton Inc. 53 0.74 333.90M 4.09 11.24

Table 1 showcases the top-line revenue, earnings per share and valuation of KB Home and D.R. Horton Inc. D.R. Horton Inc. has higher revenue and earnings than KB Home. The company with the lower P/E out of the two companies is considered for more affordable of the two firms currently. KB Home’s shares have been trading at lower P/E ratio which means it is currently more affordable than D.R. Horton Inc.

Profitability

Table 2 provides KB Home and D.R. Horton Inc.’s return on assets, return on equity and net margins.

Net Margins Return on Equity Return on Assets
KB Home 224,570,446.74% 12.4% 5.2%
D.R. Horton Inc. 625,163,827.00% 17.3% 10.9%

Risk & Volatility

A 1.37 beta indicates that KB Home is 37.00% more volatile compared to Standard and Poor’s 500. D.R. Horton Inc.’s 1.07 beta is the reason why it is 7.00% more volatile than Standard and Poor’s 500.

Analyst Ratings

KB Home and D.R. Horton Inc. Ratings and Recommendations are available in the next table.

Sell Ratings Hold Ratings Buy Ratings Rating Score
KB Home 0 2 5 2.71
D.R. Horton Inc. 0 2 6 2.75

$36.88 is KB Home’s average price target while its potential upside is 7.55%. Competitively the average price target of D.R. Horton Inc. is $57.56, which is potential 5.15% upside. The results provided earlier shows that KB Home appears more favorable than D.R. Horton Inc., based on analyst opinion.

Insider and Institutional Ownership

KB Home and D.R. Horton Inc. has shares owned by institutional investors as follows: 95.5% and 89.2%. About 2.3% of KB Home’s share are owned by insiders. On the other hand, insiders owned about 6.6% of D.R. Horton Inc.’s shares.

Performance

Here are the Weekly, Monthly, Quarterly, Half Yearly, Yearly and YTD Performance of both pretenders.

Performance (W) Performance (M) Performance (Q) Performance (HY) Performance (Y) Performance (YTD)
KB Home -0.61% 1.23% 2.5% 28.02% 12.36% 37.54%
D.R. Horton Inc. 4.62% 5.3% 3.56% 22.19% 5.1% 32.52%

For the past year KB Home was more bullish than D.R. Horton Inc.

Summary

D.R. Horton Inc. beats KB Home on 12 of the 14 factors.

KB Home operates as a homebuilding company in the United States. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, move-up, and active adult homebuyers. The company also provides property and casualty insurance, as well as earthquake, flood, and personal property insurance to its homebuyers; title services; and mortgage banking services, including residential mortgage loan originations to its homebuyers. It has operations in California, Arizona, Nevada, Colorado, Texas, Florida, and North Carolina, The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is headquartered in Los Angeles, California.

D.R. Horton, Inc. operates as a homebuilding company. It engages in the acquisition and development of land; and construction and sale of homes in 26 states and 78 markets in the United States under the names of D.R. Horton, AmericaÂ’s Builder, Express Homes, Emerald Homes, Regent Homes, Crown Communities, and Pacific Ridge Homes. The company constructs and sells single-family detached homes; and attached homes, such as town homes, duplexes, triplexes, and condominiums. It is also involved in the origination and sale of mortgages; and provision of title insurance policies, and examination and closing services. In addition, through its subsidiary, it engages in the acquisition, entitlement, development, and sale of residential and mixed-use real estate communities. The company primarily serves title insurance agents, homebuyers, and homebuilding customers. D.R. Horton, Inc. was founded in 1978 and is headquartered in Arlington, Texas.

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