D.R. Horton, Inc. (DHI) vs Toll Brothers Inc. (TOL)

D.R. Horton, Inc. and Toll Brothers Inc. are both Residential Construction companies. D.R. Horton, Inc. is the larger, with a market value of $39.5B against $12.5B — 3.1× the size. Toll Brothers Inc. trades at the lower P/E: 11.0× against 13.4×. Toll Brothers Inc. grew revenue faster over the last twelve months: −1.08% against −3.54%. Toll Brothers Inc. has the higher net margin (11.1% vs 9.15%) and the higher return on invested capital (9.08% vs 9.02%). Both pay a dividend; Toll Brothers Inc. yields more (0.85% vs 0.75%). Across the 23 metrics below, Toll Brothers Inc. leads on 16 and D.R. Horton, Inc. on 7.

Valuation

Metric DHI TOL Residential Construction median
P/E 13.41 10.95 13.51
P/S 1.20 1.20 1.02
P/B 1.64 1.51 1.17
Price to free cash flow 12.45 11.83 16.79
EV/EBITDA 10.69 9.22 10.48
EV/Sales 1.26 1.36 1.31
Earnings yield 7.46% 9.13% 7.37%
Free cash flow yield 8.03% 8.45% 5.73%

Profitability

Metric DHI TOL Residential Construction median
Gross margin 22.61% 23.75% 22.30%
Operating margin 11.43% 13.84% 9.03%
Net margin 9.15% 11.14% 7.30%
Free cash flow margin 9.62% 10.13% 8.46%
Return on equity 12.46% 14.39% 9.84%
Return on assets 8.37% 8.24% 7.43%
Return on invested capital 9.02% 9.08% 6.90%

Growth

Metric DHI TOL Residential Construction median
Revenue growth (TTM) (3.54%) (1.08%) (7.37%)
EPS growth (last fiscal year) (19.32%) (10.13%) —
Revenue growth, 5-year CAGR 11.02% 9.15% 8.74%
Net income growth, 5-year CAGR 8.60% 24.70% 8.43%

Health

Metric DHI TOL Residential Construction median
Debt to equity 0.29 0.32 0.20
Current ratio 6.43 4.53 3.56
Net debt to EBITDA 0.08 0.85 0.28

Dividend

Metric DHI TOL Residential Construction median
Dividend yield 0.75% 0.85% 0.89%
Payout ratio 0.07 0.06 0.00

Size

Metric DHI TOL Residential Construction median
Market cap 39.48b 12.54b 4.18b

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