How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in PulteGroup (PHM) ten years ago? It may not have been easy to hold on to PHM for all that time, but if you did, how much would your investment be worth today?
PulteGroup's Business In-Depth
With that in mind, let's take a look at PulteGroup's main business drivers.
Based in Atlanta, GA, PulteGroup Inc. engages in homebuilding and financial services businesses, primarily in the United States. The company conducts operations through two primary business segments – Homebuilding (which accounted for 98.1% as of 2022 total revenues) and Financial Services (1.9%).
The Homebuilding segment offers a wide variety of home designs including single family detached, townhouses, condominiums and duplexes at different prices, with a variety of options and amenities to all major customer segments: first-time, move-up and active adult. Pulte’s brand portfolio includes Centex, Pulte Homes,Del Webb, DiVosta Homes, John Wieland Homes and Neighborhoods, and American West.
The company operates in 810 active communities in 42 markets in 24 states across the United States in 2022. The homebuilding division is broken down into six reportable segments; Northeast, Southeast, Florida, Texas, Midwest and West.
Pulte’s direct subsidiaries under the homebuilding segment include Pulte Diversified Companies Inc., Del Webb Corporation and Centex Corporation.
Pulte’s Financial Services business includes mortgage banking and title operations through Pulte Mortgage and other subsidiaries. Pulte Mortgage arranges financing by originating mortgage loans for homebuyers.
In first-quarter 2023, the company’s orders were 8,898 units, up from 8,767 homes in the prior- year quarter. Quarter-end backlog totaled 13,129 homes versus 19,935 units in the year ago quarter. Potential housing revenues from quarter-end backlog decreased 30.8% from the prior-year to $8 billion.
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in PulteGroup a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in June 2013 would be worth $3,420.85, or a 242.09% gain, as of June 7, 2023. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 164.02% and the price of gold increased 36.81% over the same time frame in comparison.
Going forward, analysts are expecting more upside for PHM.
Shares of PulteGroup have outperformed its industry in the past three months. The company reported impressive first-quarter 2023 results, wherein earnings and revenues surpassed the Zacks Consensus Estimate by 32% and 9.4%, respectively. The company has been benefiting from robust land acquisition and operational strategic initiatives. PHM expects the land acquisition and development investment in 2023 to range within $3.5-$4 billion, up from the previously considered value of $3.3 billion. This is attributed to strong buyer demand and increase in its construction activities. Earnings estimates for 2023 have increased in the past 30 days. Although a challenging sales environment, higher cancellation rates, supply-chain issues, and significant inflation are dampening the performance, the improving interest rate environment is raising hope.
Shares have gained 6.57% over the past four weeks and there have been 6 higher earnings estimate revisions for fiscal 2023 compared to none lower. The consensus estimate has moved up as well.
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