Validea's Top Consumer Discretionary Stocks Based On Benjamin Graham - 9/19/2024
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 19 2024
0mins
Source: NASDAQ.COM
Top Rated Consumer Discretionary Stocks: Validea's Value Investor model, based on Benjamin Graham's strategy, identifies several mid-cap value stocks in the Consumer Discretionary sector, including Meritage Homes Corp, Asbury Automotive Group, Foot Locker Inc, and Century Communities Inc, all rated at 71% based on their fundamentals and valuations.
About Benjamin Graham and Validea: Benjamin Graham, known as the "Father of Value Investing," influenced many successful investors and developed a methodology that continues to guide investment strategies today, while Validea provides stock analysis and model portfolios based on the principles of renowned investors.
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Analyst Views on MTH
Wall Street analysts forecast MTH stock price to rise
6 Analyst Rating
2 Buy
4 Hold
0 Sell
Moderate Buy
Current: 64.790
Low
74.00
Averages
85.50
High
104.00
Current: 64.790
Low
74.00
Averages
85.50
High
104.00
About MTH
Meritage Homes Corporation is a designer and builder of single-family attached and detached homes. The Company’s segments include homebuilding and financial services. The homebuilding segment is engaged in the business of acquiring and developing land, constructing homes, marketing and selling those homes and providing warranty and customer services. It has operations in three regions: West, Central and East, which are comprised of 12 states: Arizona, California, Colorado, Utah, Texas, Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee. These three regions are its principal homebuilding segments. The financial services segment offers title and escrow, mortgage, and insurance services. Its financial services operations also provide mortgage services to its homebuyers through an unconsolidated joint venture. The Company’s homebuilding activities are conducted under the name of Meritage Homes in each of its homebuilding markets.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Meritage Homes Provides Mortgage-Free Home to Veterans
- Mortgage-Free Home Donation: Meritage Homes is providing a brand-new, mortgage-free home to a military family in Gulfport, Mississippi, showcasing its commitment to veterans, having donated 22 such homes since 2013, which underscores the company's dedication to social responsibility.
- Community Development: The new home, located in Meritage's Hidden Trails community, spans 2,000 square feet and features four bedrooms, three bathrooms, and a two-car garage, offering convenient access to transportation and amenities, thereby enhancing the community's appeal and value.
- Independence Day Celebration: In celebration of America's 250th Independence Day, Meritage Homes partners with Operation Homefront to honor military personnel and their families, which elevates the brand's image and strengthens customer loyalty.
- Future Outlook: This donation not only provides a stable living environment for the military family but also sets a positive example for Meritage Homes in terms of social responsibility, likely attracting more customers interested in the company's sustainable development and community engagement efforts.
See More
Meritage Homes Declares Quarterly Dividend of $0.48
- Quarterly Dividend Announcement: Meritage Homes has declared a quarterly dividend of $0.48 per share, consistent with previous distributions, indicating stable cash flow and profitability, which is likely to attract more income-focused investors.
- Dividend Yield: The forward yield of 3.01% reflects the company's attractiveness in the current market environment, potentially increasing demand for its stock among yield-seeking investors.
- Shareholder Record Date: The dividend will be payable on June 30, with a record date of June 16 and an ex-dividend date also on June 16, providing investors with a clear timeline to participate in the dividend distribution.
- Future Delivery Expectations: Meritage projects Q2 2026 closings to range between 3,650 and 3,900 homes, indicating the company's ability to maintain strong market performance amid higher-than-anticipated incentives.
See More
Meritage Announces First Quarter 2026 Results; Improving Margins and Positive Outlook
Financial Performance: The first quarter of 2026 shows rising margins for the company, indicating improved profitability.
Market Outlook: The overall outlook for the company is becoming more positive, suggesting potential growth and stability in the near future.
See More
Meritage Homes Q1 2026 Earnings Call Insights
- Sales Order Decline: Meritage Homes reported Q1 sales orders of 3,664 units, a 5% decrease from the previous year, indicating that consumer confidence has been negatively impacted in a challenging market environment, necessitating higher incentives to capture near-term demand.
- Record Community Count: As of March 31, the number of active communities reached 345, setting a new company record, with expectations for community count growth of 5% to 10% in 2026, which will drive overall sales volume and revenue increases.
- Increased Shareholder Returns: Despite macroeconomic pressures, Meritage repurchased $130 million worth of common shares in Q1 and raised its dividend by 12% to $0.48 per share, demonstrating a strong commitment to shareholder value and proactive capital management.
- Margin Pressure Intensifies: The gross margin for Q1 was 17.5%, down 400 basis points from the prior year, primarily due to increased incentives and rising land costs, with expectations that this structural pressure will continue to impact profitability in 2026.
See More
Meritage Homes Q1 Earnings Miss Expectations
- Earnings Shortfall: Meritage Homes reported a Q1 non-GAAP EPS of $0.86, missing expectations by $0.12, indicating challenges in profitability amid current market conditions, which may affect investor confidence.
- Significant Revenue Decline: The company generated $1.11 billion in revenue for Q1, a 17.2% year-over-year decrease that fell short by $60 million, primarily due to lower home closing volumes and average sales prices, reflecting a weak demand environment.
- Decreased Orders: Orders for 3,664 homes in Q1 decreased by 5% year-over-year, driven by an 18% drop in average absorption pace, despite a 17% increase in average community count, highlighting intensified market competition and insufficient customer demand.
- Guidance Revision: The company has updated its guidance for full-year 2026 home closing volume and revenue to be within 5% of 2025 results based on current market conditions, indicating uncertainty and a cautious outlook for future performance.
See More
Meritage Homes Scheduled to Announce Q1 Earnings on April 22
- Earnings Announcement Date: Meritage Homes (MTH) is set to release its Q1 2023 earnings on April 22 after market close, with a consensus EPS estimate of $0.98, reflecting a significant 42% year-over-year decline, indicating substantial pressure on profitability.
- Revenue Expectations Decline: The consensus revenue estimate stands at $1.17 billion, down 12.7% year-over-year, highlighting weak demand in the housing market that could adversely affect overall performance.
- Historical Performance Review: Over the past year, MTH has beaten EPS estimates 75% of the time and revenue estimates 50% of the time, indicating relative stability in earnings forecasts but greater volatility in revenue projections.
- Expectation Revision Status: In the last three months, there have been no upward revisions for EPS estimates and five downward revisions, while revenue estimates also saw no upward revisions and six downward revisions, reflecting a diminishing market confidence in the company's future performance.
See More
Meritage Homes Provides Mortgage-Free Home to Veterans
- Mortgage-Free Home Donation: Meritage Homes is providing a brand-new, mortgage-free home to a military family in Gulfport, Mississippi, showcasing its commitment to veterans, having donated 22 such homes since 2013, which underscores the company's dedication to social responsibility.
- Community Development: The new home, located in Meritage's Hidden Trails community, spans 2,000 square feet and features four bedrooms, three bathrooms, and a two-car garage, offering convenient access to transportation and amenities, thereby enhancing the community's appeal and value.
- Independence Day Celebration: In celebration of America's 250th Independence Day, Meritage Homes partners with Operation Homefront to honor military personnel and their families, which elevates the brand's image and strengthens customer loyalty.
- Future Outlook: This donation not only provides a stable living environment for the military family but also sets a positive example for Meritage Homes in terms of social responsibility, likely attracting more customers interested in the company's sustainable development and community engagement efforts.
See More
Meritage Homes Declares Quarterly Dividend of $0.48
- Quarterly Dividend Announcement: Meritage Homes has declared a quarterly dividend of $0.48 per share, consistent with previous distributions, indicating stable cash flow and profitability, which is likely to attract more income-focused investors.
- Dividend Yield: The forward yield of 3.01% reflects the company's attractiveness in the current market environment, potentially increasing demand for its stock among yield-seeking investors.
- Shareholder Record Date: The dividend will be payable on June 30, with a record date of June 16 and an ex-dividend date also on June 16, providing investors with a clear timeline to participate in the dividend distribution.
- Future Delivery Expectations: Meritage projects Q2 2026 closings to range between 3,650 and 3,900 homes, indicating the company's ability to maintain strong market performance amid higher-than-anticipated incentives.
See More
Meritage Announces First Quarter 2026 Results; Improving Margins and Positive Outlook
Financial Performance: The first quarter of 2026 shows rising margins for the company, indicating improved profitability.
Market Outlook: The overall outlook for the company is becoming more positive, suggesting potential growth and stability in the near future.
See More
Meritage Homes Q1 2026 Earnings Call Insights
- Sales Order Decline: Meritage Homes reported Q1 sales orders of 3,664 units, a 5% decrease from the previous year, indicating that consumer confidence has been negatively impacted in a challenging market environment, necessitating higher incentives to capture near-term demand.
- Record Community Count: As of March 31, the number of active communities reached 345, setting a new company record, with expectations for community count growth of 5% to 10% in 2026, which will drive overall sales volume and revenue increases.
- Increased Shareholder Returns: Despite macroeconomic pressures, Meritage repurchased $130 million worth of common shares in Q1 and raised its dividend by 12% to $0.48 per share, demonstrating a strong commitment to shareholder value and proactive capital management.
- Margin Pressure Intensifies: The gross margin for Q1 was 17.5%, down 400 basis points from the prior year, primarily due to increased incentives and rising land costs, with expectations that this structural pressure will continue to impact profitability in 2026.
See More
Meritage Homes Q1 Earnings Miss Expectations
- Earnings Shortfall: Meritage Homes reported a Q1 non-GAAP EPS of $0.86, missing expectations by $0.12, indicating challenges in profitability amid current market conditions, which may affect investor confidence.
- Significant Revenue Decline: The company generated $1.11 billion in revenue for Q1, a 17.2% year-over-year decrease that fell short by $60 million, primarily due to lower home closing volumes and average sales prices, reflecting a weak demand environment.
- Decreased Orders: Orders for 3,664 homes in Q1 decreased by 5% year-over-year, driven by an 18% drop in average absorption pace, despite a 17% increase in average community count, highlighting intensified market competition and insufficient customer demand.
- Guidance Revision: The company has updated its guidance for full-year 2026 home closing volume and revenue to be within 5% of 2025 results based on current market conditions, indicating uncertainty and a cautious outlook for future performance.
See More
Meritage Homes Scheduled to Announce Q1 Earnings on April 22
- Earnings Announcement Date: Meritage Homes (MTH) is set to release its Q1 2023 earnings on April 22 after market close, with a consensus EPS estimate of $0.98, reflecting a significant 42% year-over-year decline, indicating substantial pressure on profitability.
- Revenue Expectations Decline: The consensus revenue estimate stands at $1.17 billion, down 12.7% year-over-year, highlighting weak demand in the housing market that could adversely affect overall performance.
- Historical Performance Review: Over the past year, MTH has beaten EPS estimates 75% of the time and revenue estimates 50% of the time, indicating relative stability in earnings forecasts but greater volatility in revenue projections.
- Expectation Revision Status: In the last three months, there have been no upward revisions for EPS estimates and five downward revisions, while revenue estimates also saw no upward revisions and six downward revisions, reflecting a diminishing market confidence in the company's future performance.
See More
