Core Viewpoint - PulteGroup reported strong second-quarter 2024 earnings, with significant increases in earnings per share (EPS) and revenues, driven by a balanced operating model and strong cash flows [2][4]. Financial Performance - Adjusted EPS for Q2 2024 was $3.58, exceeding the consensus estimate of $3.21 by 11.5% and up 19.3% from $3.00 a year ago [4]. - Total revenues reached $4.6 billion, surpassing the consensus estimate of $4.48 billion by 2.7% and increasing 9.8% from $4.19 billion in the previous year [4]. - Homebuilding segment revenues rose 9.6% year over year to $4.49 billion, with home sale revenues also increasing by 9.6% to $4.45 billion [5]. - Financial Services segment revenues increased 21.1% year over year to $111.7 million, with pretax income rising to $63 million from $46 million a year ago [6]. Operational Highlights - The number of homes closed increased by 8% to 8,097 units, while the average selling price of homes delivered was $549,000, up 2% year over year [5]. - Home sales gross margin improved by 30 basis points to 29.9%, supported by strong homebuyer demand [6]. - New home orders declined 3.7% year over year to 7,649 units, but the value of new orders rose 2% to $4.4 billion [5]. Cash Flow and Capital Structure - Cash, cash equivalents, and restricted cash at the end of Q2 were $1.45 billion, down from $1.85 billion at the end of 2023 [7]. - Net cash provided by operating activities was $657.3 million in the first half of 2024, compared to $1.45 billion in the prior-year period [7]. - The company repurchased 2.8 million common shares for $314 million at an average price of $113.79 per share during the reported quarter [7]. Market Dynamics - Long-term market dynamics favor PulteGroup due to a structural shortage of homes from years of underbuilding, despite short-term impacts from interest rate movements [3]. - The company achieved a 27.1% return on equity over the past 12 months, reflecting effective management of sales price and pace [3]. Industry Comparison - PulteGroup operates within the Zacks Building Products - Home Builders industry, where competitor D.R. Horton reported revenues of $9.97 billion, a year-over-year increase of 2.5% [11]. - D.R. Horton has a Zacks Rank 3 (Hold), while PulteGroup holds a Zacks Rank 2 (Buy), indicating a more favorable outlook for PulteGroup [10][11].

The Federal Reserve has kept interest rates at record-high levels for quite some time, citing additional progress in price pressures ebbing toward the central bank’s target of 2%. However, July’s doomed jobs data raised recession fearmongering and compelled market participants to believe that the Fed has been a bit late in slashing interest rates.Nevertheless, cooling consumer and wholesale prices last month strengthened hopes that the Fed would initiate an interest rate cut in September, even if it won’t b ...

Core Insights - The housing market is experiencing a positive shift due to falling mortgage rates, which have dropped to their lowest level in over a year, enhancing the purchasing power of potential homebuyers [1][2][5] Mortgage Rate Trends - The average rate for a 30-year fixed mortgage decreased to 6.47% for the week ending August 8, down from 6.73% the previous week, marking the lowest level since May 2023 [2] - The 15-year fixed mortgage rate also fell to 5.63%, down from 5.99% the prior week [2] Economic Factors Influencing Rates - Mortgage rates declined following a disappointing jobs report that raised recession concerns, leading to expectations of a Federal Reserve interest rate cut in September [3][4] - The personal consumption expenditures index increased by 2.5% year over year in June, a slowdown compared to previous months, prompting discussions of potential interest rate cuts by the Fed [3] Housing Market Dynamics - The drop in mortgage rates is expected to shift the housing market from a seller's to a buyer's market, as affordability issues faced by homebuyers are alleviated [5] - Increased housing market turnover is anticipated as prospective buyers, particularly millennials, are ready to make purchases [5] Company Performance and Outlook - PulteGroup, Inc. (PHM) has a Zacks Rank of 2 and a VGM Score of B, with a projected earnings growth rate of 13.3% for the current year and a return on equity (ROE) of 25.7% [7] - KB Home (KBH) also holds a Zacks Rank of 2 and a VGM Score of B, with an expected earnings growth rate of 19.2% for the current year [8] - M/I Homes, Inc. (MHO) has a Zacks Rank of 1 and a VGM Score of B, with a projected earnings growth rate of 20.8% for the current year and a net profit margin of 12.7% [9] Stock Performance - Year-to-date stock performance shows PulteGroup gaining 18.3%, KB Home increasing by 27.6%, and M/I Homes rising by 3.4% [9]

Core Viewpoint - PulteGroup, Inc. reported strong second-quarter 2024 results, demonstrating resilience in housing demand and improvements in capital efficiency despite a challenging interest rate environment [1][5]. Financial Performance - The company achieved a 9.6% year-over-year increase in home sale revenues, totaling $4.45 billion, driven by an 8% rise in the number of homes closed and a 2% increase in average sales price (ASP) [4]. - Earnings per share (EPS) increased by 19%, reaching a record of $3.83 per share, with a return on equity of 27.1% over the trailing 12-month period [5][10]. - PulteGroup's stock rose 6% following the earnings report, outperforming the industry average gain of 3.6% [1][3]. Market Position and Strategy - The company maintains a balanced operating model, with a 50/50 split between build-to-order and speculative sales, allowing it to meet immediate demand while accommodating customization [8][9]. - PulteGroup's gross margin improved to 29.9%, reflecting strategic pricing dynamics and reduced incentives, despite challenges in certain markets [4][6]. Challenges and Outlook - Demand has been inconsistent, particularly in Florida and Texas, leading to a 4% decline in net new orders year-over-year [6][7]. - The company anticipates a gross margin of 29% for Q3 and 28.5%-29% for Q4, down from previous expectations due to market dynamics [6][10]. - Despite these challenges, PulteGroup expects long-term annual growth of 5% to 10%, supported by low housing inventory and favorable demographic trends [10][14]. Investment Potential - Analysts have increased their EPS estimates for 2024 to $13.28 from $12.85, indicating optimism about the stock's growth potential [10]. - The company's trailing 12-month return on equity (ROE) of 25.7% is significantly higher than the industry average of 18.3%, showcasing efficient use of shareholder funds [14]. - PulteGroup has a strong financial position, having paid quarterly dividends for nearly four decades, with a recent 5% increase in its dividend [15].

miflippo It may come as a surprise that the largest homebuilders have crushed the broader market over the past decade. While the S&P 500 achieved total returns of 235% over the last ten years, 101% at 5Y mark, and 20% over the TTM, the iShares U.S. Home Construction ETF (ITB) has risen by an impressive 451%, 213%, and 32% respectively. This outstanding performance is all the more noteworthy given the challenges posted by a volatile interest rate environment, rising construction costs, and ever-changing ...

Market Overview - The U.S. equity markets have shown a modest uptrend, driven by optimism regarding potential rate cuts due to easing inflation and strong economic metrics [1] - The Federal Reserve is expected to maintain the benchmark funds rate between 5.25% and 5.5%, while investors are looking for signals of possible future cuts [1] - The second quarter GDP growth was better than expected at 2.8%, alongside a robust labor market, indicating favorable conditions for market sentiment [1] Investment Strategy - Investors are advised to focus on "cash cow" stocks that provide higher returns, emphasizing the importance of efficiency ratios like return on equity (ROE) [2] - High ROE indicates that a company is effectively reinvesting cash for high returns, distinguishing profitable companies from less efficient ones [3] Screening Parameters - Stocks were screened based on criteria including cash flow greater than $1 billion and ROE exceeding the industry average [4] - Additional metrics include Price/Cash Flow lower than the industry average, Return on Assets (ROA) greater than the industry average, and 5-Year EPS Historical Growth exceeding the industry average [4] Selected Stocks - **Best Buy Co., Inc. (BBY)**: Long-term earnings growth expectation of 5.1% with a trailing four-quarter earnings surprise of 11% on average, Zacks Rank 2 [5] - **The AES Corporation (AES)**: Global power company with a trailing four-quarter earnings surprise of 13.8% on average, Zacks Rank 2 [6] - **Lockheed Martin Corporation (LMT)**: Largest defense contractor with a long-term earnings growth expectation of 4.2% and a trailing four-quarter earnings surprise of 7.5% on average, Zacks Rank 2 [7] - **PulteGroup, Inc. (PHM)**: Homebuilding company with a long-term earnings growth expectation of 19% and a trailing four-quarter earnings surprise of 10% on average, Zacks Rank 2 [8] - **Banco de Chile (BCH)**: Provides various banking services with a trailing four-quarter earnings surprise of 7.1% on average, Zacks Rank 2 [8]

Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. However, it isn't easy to find a great growth stock.In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks Growth Sty ...

Core Viewpoint - PulteGroup (PHM) has shown significant stock performance, with an 18.1% increase over the past month and a 25.9% rise since the beginning of the year, outperforming both the Zacks Construction sector and the Zacks Building Products - Home Builders industry [1] Group 1: Stock Performance - PulteGroup shares reached a new 52-week high of $130.93 in the previous session [1] - The stock has outperformed the Zacks Construction sector, which increased by 16.8%, and the Zacks Building Products - Home Builders industry, which rose by 20.8% [1] Group 2: Earnings Performance - PulteGroup has consistently exceeded earnings expectations, not missing the consensus estimate in the last four quarters [2] - In the latest earnings report on July 23, 2024, the company reported EPS of $3.58, surpassing the consensus estimate of $3.21, and beat the revenue estimate by 2.72% [2] - For the current fiscal year, PulteGroup is projected to achieve earnings of $13.20 per share on revenues of $17.37 billion, reflecting a 12.63% increase in EPS and an 8.13% increase in revenues [2] - For the next fiscal year, expected earnings are $13.54 per share on revenues of $18.28 billion, indicating a year-over-year change of 2.56% in EPS and 5.26% in revenues [2] Group 3: Valuation Metrics - PulteGroup has a Value Score of A, a Growth Score of B, and a Momentum Score of C, resulting in a combined VGM Score of B [3] - The stock trades at 9.9X current fiscal year EPS estimates, aligning with the peer industry average of 9.9X, and at 10.3X trailing cash flow, compared to the peer group's average of 9.6X [4] - The PEG ratio stands at 0.52, indicating that while the stock is not in the top echelon from a value perspective, it still holds a favorable position [4] Group 4: Zacks Rank - PulteGroup holds a Zacks Rank of 2 (Buy), driven by rising earnings estimates [5] - The stock meets the criteria for selection, as it carries a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, suggesting potential for further growth in the near term [5]

证券研究报告 ＃industryId＃ 房地产 ＃investSuggestion＃ ＃ PHM.N ＃普dy尔Com特pa房ny＃屋(PULTE) ＃title＃ 季度业绩稳健增长 ＃createTime1＃ 2024 年 07 月 24 日 无评级 ＃ investSug gestionCh ange＃ ＃市场ma数rk据etData＃ 市场数据日期 2024.07.23 收盘价（美元） 125.67 总股本（亿股） 2.08 总市值（亿美元） 264.34 净资产（亿美元） 112.23 总资产（亿美元） 165.44 每股净资产(美元) 53.98 数据来源：Wind，兴业证券经济与金融研究院整理 ＃相关rel报ate告dReport＃ 《季度业绩符合预期，回购分红 积极回报股东》20240508 《提升每股派息，回购计划扩 容》20240202 songjian@xyzq.com.cn SFC：BMV912 SAC：S0190518010002 我们的观点：公司保持稳健的经营和业绩增长，资本配置兼顾企业发展 和股东回报。强劲的现金流和充足的土储既能满足企业的发展，又能积 极通过回购和分红来回报股东。 ...

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents PulteGroup's unaudited financial statements for Q2 and H1 2024, including balance sheets, operations, equity, cash flows, MD&A, market risk, and internal controls disclosures [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The financial statements detail PulteGroup's financial position and performance, showing $16.5 billion in total assets, $4.6 billion in Q2 revenues, and $1.47 billion in H1 net income, alongside equity changes and cash flows | Financial Metric | June 30, 2024 (Unaudited) (in thousands of USD) | December 31, 2023 (in thousands of USD) | | :--- | :--- | :--- | | Total cash, cash equivalents, and restricted cash | $1,445,966 | $1,849,177 | | House and land inventory | $12,302,301 | $11,795,370 | | Total Assets | $16,544,069 | $16,087,050 | | Notes payable | $1,650,178 | $1,962,218 | | Total Shareholders' equity | $11,222,823 | $10,383,257 | | Metric (Q2) | 2024 (in thousands of USD) | 2023 (in thousands of USD) | % Change | | :--- | :--- | :--- | :--- | | Total revenues | $4,599,655 | $4,188,753 | +9.8% | | Net income | $809,133 | $720,345 | +12.3% | | Diluted EPS | $3.83 | $3.21 | +19.3% | | Metric (Six Months) | 2024 (in thousands of USD) | 2023 (in thousands of USD) | % Change | | :--- | :--- | :--- | :--- | | Total revenues | $8,548,815 | $7,764,394 | +10.1% | | Net income | $1,472,109 | $1,252,604 | +17.5% | | Diluted EPS | $6.93 | $5.55 | +24.9% | | Activity (Six Months Ended June 30) | 2024 (in thousands of USD) | 2023 (in thousands of USD) | | :--- | :--- | :--- | | Net cash provided by operating activities | $657,264 | $1,450,583 | | Net cash used in investing activities | ($66,201) | ($53,996) | | Net cash used in financing activities | ($994,274) | ($713,360) | | Net (decrease) increase in cash | ($403,211) | $683,227 | - For the six months ended June 30, 2024, the company repurchased **5.1 million shares** for **$560.0 million** and declared dividends of **$84.7 million**, compared to repurchasing **6.4 million shares** for **$400.0 million** and declaring dividends of **$71.8 million** in the same period of 2023[77](index=77&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses weakening demand in Q2 2024 due to higher interest rates, improved production efficiency, and strong liquidity, detailing performance across Homebuilding and Financial Services segments - Demand for new homes began to weaken during the second quarter of 2024, with net new orders decreasing **4% YoY** for the quarter, attributed to challenged affordability from higher interest rates, price increases, and inflation[107](index=107&type=chunk) - The company improved production efficiency, with home construction time approximately **nine weeks shorter** at the end of Q2 2024 compared to the prior year, contributing to an **8% increase in Q2 closings**[109](index=109&type=chunk) | Metric | Q2 2024 (in millions of USD) | Q2 2023 (in millions of USD) | % Change | | :--- | :--- | :--- | :--- | | Home sale revenues | $4,448.2 | $4,058.9 | +10% | | Gross margin from home sales | 29.9% | 29.6% | +30 bps | | Closings (units) | 8,097 | 7,518 | +8% | | Net new orders (units) | 7,649 | 7,947 | -4% | | Backlog (units) | 12,982 | 13,558 | -4% | - The company maintains a strong liquidity position with **$1.4 billion in cash and equivalents** and **$952.6 million available** under its Revolving Credit Facility as of June 30, 2024, with the debt-to-total capitalization ratio improving to **12.8%** from **15.9%** at year-end 2023[154](index=154&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) PulteGroup's primary market risk is interest rate fluctuations affecting its $1.66 billion fixed-rate and $524 million variable-rate debt, with no material changes from the prior year-end report | Debt Type | Total Principal (in thousands of USD) | Fair Value (in thousands of USD) | Weighted-Avg Interest Rate | | :--- | :--- | :--- | :--- | | Fixed rate debt | $1,657,048 | $1,734,524 | 6.04% | | Variable rate debt | $524,042 | $524,042 | 7.14% | - The company is subject to market risk from interest rate fluctuations, primarily impacting the fair value of fixed-rate debt and the earnings and cash flows related to variable-rate debt[182](index=182&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of June 30, 2024, with no material changes to internal control over financial reporting - The President and CEO, along with the Executive VP and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2024[189](index=189&type=chunk) - No changes occurred during the quarter ended June 30, 2024, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[189](index=189&type=chunk) [PART II OTHER INFORMATION](index=38&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides supplementary information, confirming no material developments in legal proceedings or risk factors, detailing Q2 2024 share repurchase activity, and listing exhibits [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material developments regarding legal proceedings since its Annual Report on Form 10-K for the year ended December 31, 2023 - There have been no material developments in legal proceedings since the 2023 year-end 10-K filing[190](index=190&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) The company states there have been no material changes to its risk factors from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023 - No material changes have occurred in the company's risk factors since the 2023 year-end 10-K filing[191](index=191&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's share repurchase activities, with 2.76 million shares bought back in Q2 2024, and $1.3 billion remaining for future repurchases | Period | Total Shares Purchased | Average Price Paid (USD) | | :--- | :--- | :--- | | April 2024 | 758,165 | $111.83 | | May 2024 | 1,025,947 | $116.20 | | June 2024 | 976,727 | $112.79 | | **Q2 Total** | **2,760,839** | **$113.79** | - As of June 30, 2024, **$1.3 billion** remained under the company's share repurchase authorization, which was increased by **$1.5 billion** on January 30, 2024, and has no expiration date[194](index=194&type=chunk) [Item 5. Other Information](index=38&type=section&id=Item%205.%20Other%20Information) The company reports that no director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the second quarter of 2024 - No director or officer of the company adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter[192](index=192&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents, debt instruments, certifications, and XBRL data files