D.R. Horton vs Lennar Which Performs Better?

D.R. Horton and Lennar are two of the largest home construction companies in the United States, with both companies experiencing significant growth in recent years. Investors looking to capitalize on the booming real estate market may be considering investing in these two stocks. D.R. Horton is known for its focus on affordable housing, while Lennar has a reputation for building high-end luxury homes. Both companies have strong financials and solid track records, making them attractive options for investors seeking exposure to the real estate sector.

D.R. Horton or Lennar?

When comparing D.R. Horton and Lennar, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between D.R. Horton and Lennar.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. D.R. Horton has a dividend yield of 0.87%, while Lennar has a dividend yield of 1.3%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. D.R. Horton reports a 5-year dividend growth of 14.87% year and a payout ratio of 8.31%. On the other hand, Lennar reports a 5-year dividend growth of 56.46% year and a payout ratio of 12.37%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with D.R. Horton P/E ratio at 10.25 and Lennar's P/E ratio at 9.94. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. D.R. Horton P/B ratio is 1.93 while Lennar's P/B ratio is 1.52.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, D.R. Horton has seen a 5-year revenue growth of 1.44%, while Lennar's is 0.81%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with D.R. Horton's ROE at 19.63% and Lennar's ROE at 15.62%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $147.78 for D.R. Horton and $152.32 for Lennar. Over the past year, D.R. Horton's prices ranged from $133.02 to $199.85, with a yearly change of 50.24%. Lennar's prices fluctuated between $140.65 and $193.80, with a yearly change of 37.79%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.