Dallas, Texas 10/18/2013 (Financialstrend) – The $5.82 billion market capitalized home construction giant D.R. Horton, Inc. (NYSE:DHI) announced on October 7 that its 4Q and Fiscal 2013 year end results would be announced on November 12. In the run up to the year end earnings call, share holders of the S&P 500 tracked giant would be trying to decipher which way the wind is blowing in terms of its fourth quarter performance.
One harbinger that they can pay close attention too is Credit Suisse’s homebuyer traffic index. It had dropped to a 2-year low of in September recording a 28% dip from August. The reasons behind the slowing down of home sales were the increases in interest rates and the overall appreciation in prices of properties.
Saving grace for long term investors of DR Horton is the fact that in a Credit Suisse conducted survey of real-estate agents had stack ranked the house builder ranked second behind Toll Bros as likely construction companies that they would recommend to their customers. The survey also rationalizes that the recent cut in interest rates has not yet lured back the buyers into the housing market.
While waiting for 4Q results, one needs to also look back at how its 3Q had panned out to set ones expectations. 3Q sales has gone up 47% in a quarter on quarter compare adding up to $5.7 billion over a trailing 12 month period. In the same period it had managed to record a net income of $423 million. It has paid out an annual dividend of $0.15 per share translating to a forward yield of 0.83%.
As of close of business on October 16, the stock was trading at $18.05 per share and at current valuations is down 33% from its 52 week high valuations. The stock has been under pressure to perform over the past few quarters.