Buffett Brain · Research note
Score updated 27 Oct 2026 · analysis from 18 May 2026
DHI· Consumer Discretionary
D.R. Horton
D.R. Horton trades at 12x earnings with 17.5% historical ROIC, but homebuilding cyclicality and a narrow scale moat hold the verdict at unclear.
Buffett fit
Partial fit
Owner
53
Durability
64
Management
75
Price
96
Score updated 27 Oct 2026 · analysis from 18 May 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Consumer Discretionary stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning DHI at 12.3x earnings means you are paying a single-digit multiple on what is genuinely the best operator in U.S.
The full reasoning comes with a free account.
Americans need 1.5 million new homes a year and current production runs below that.
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Share count is shrinking 3.9% per year, meaningful per-share .
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of 12.3x, owner-earnings yield of 8.5%, EV/ under 10x, these are the kinds of numbers Buffett actually responds to.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
6- 1 of 12.3 and owner-earnings yield of 8.5% offer genuine valuation cushion
- 2Five-year average of 17.5% reflects best-in-class operator economics
- 3Share count shrinking 3.9% per year drives per-share
- 4Interest coverage of 42.9x means the balance sheet is essentially unleveraged
Concerns
4- 122.8% is structurally lower than software or branded CPG businesses
- 2Trailing of 9.7% has compressed sharply from the 17.5% five-year average
- 3Five-year EPS CAGR of 0.1% shows how cyclical earnings really are
- 4Worst EPS drawdown of -19.5% confirms exposure to mortgage-rate cycles
Price history
$147+64.1%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
D.R. Horton builds homes in 98 markets across 31 states under brands targeting first-time (Express), move-up (D.R. Horton), luxury (Emerald) and value (Freedom) buyers. The 22.8% and 11.8% are strong for the industry because national scale lets DHI buy lumber and land cheaper than regional builders. Five-year average of 17.5% confirms the playbook works through cycles, even if trailing ROIC has compressed to 9.7% as the market normalizes.
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Consumer Discretionary
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