Toll Brothers (TOL) Lures Investors With 10% Dividend Hike
Toll Brothers, Inc. TOL declared a rise in its dividend payout, underscoring its commitment to sustainable expansion and its capacity to generate lasting value for shareholders.
The board of directors approved a 10% hike in its quarterly cash dividend to 23 cents per share (92 cents annually) from 21 cents (84 cents annually). The new dividend will be paid out on Apr 19 to shareholders of record as of Apr 5, 2024. The dividend yield, based on TOL’s Mar 12 closing price, is approximately 0.75%.
Shares of this Horsham, PA-based homebuilder have gained 2.4% during the trading session on Mar 12 and 0.4% in the after-hour trading session on the same day.
Consistent Dividend
Toll Brothers has consistently demonstrated a pattern of escalating dividend distributions, marking increases over the past four fiscal years. This upward trajectory can be attributed to its robust financial position, ample liquidity, strong backlog and improved macro backdrop, all of which serve as key drivers for the dividend elevation.
As of the first quarter of fiscal 2024-end, Toll Brothers had more than $2.5 billion of total liquidity, comprising $754.8 million in cash and cash equivalents and $1.8 billion available under the revolver capacity.
At the end of first-quarter fiscal 2024, the company had a total backlog of $7.08 billion. Considering the range of 10,000-10,500 homes projected to be delivered (up from 9,597 units in fiscal 2023), the company believes fiscal 2024 to be another solid high-margin year.
Based on the strength of backlog and including estimates for increased cancelations and incentivizing, the company expects fiscal 2024 earnings per share between $13.25 and $13.75 (compared with $12.36 per share in fiscal 2023) and book value per share to increase to approximately $77 at the fiscal 2024-end.
Image Source: Zacks Investment Research
Shares of Toll Brothers have risen 51.3% over the past six months, outperforming the Zacks Building Products - Home Builders industry’s growth of 34.6%. The company is gaining from strong market demand, combined with its policy of focusing on operational efficiency. Also, the emphasis on affordable luxury communities and its build-to-order model bodes well.
Zacks Rank & Other Key Picks
TOL currently sports a Zacks Rank #1 (Strong Buy).
Some other top-ranked stocks in the Zacks Construction sector are:
NVR, Inc. NVR currently sports a Zacks Rank of 1. The stock has gained 24.5% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVR delivered a trailing four-quarter earnings surprise of 8.1%, on average. The Zacks Consensus Estimate for NVR’s 2024 sales and EPS indicates growth of 7.7% and 4.6%, respectively, from the prior-year levels.
Summit Materials, Inc. SUM currently sports a Zacks Rank of 1. SUM delivered a trailing four-quarter earnings surprise of 18.2%, on average. The stock has gained 27.9% in the past six months.
The Zacks Consensus Estimate for SUM’s 2024 sales and EPS indicates growth of 80.2% and 53.2%, respectively, from a year ago.
Century Communities, Inc. CCS presently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 49.2%, on average. Shares of CCS have rallied 22.8% in the past six months.
The Zacks Consensus Estimate for CCS’ 2024 sales and EPS indicates a rise of 11.1% and 24.4%, respectively, from the prior-year levels.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Toll Brothers Inc. (TOL) : Free Stock Analysis Report
Century Communities, Inc. (CCS) : Free Stock Analysis Report
NVR, Inc. (NVR) : Free Stock Analysis Report
Summit Materials, Inc. (SUM) : Free Stock Analysis Report
