Three reasons investors have fallen in love -2-

Companies calculate earnings per share by dividing net income by average counts of shares outstanding. Leaving the 17 home builders in the same order, here is how their share counts have changed over the past one year and five years through their most recently reported fiscal quarter-ends:

   Home builder                 Ticker   One-year change in average share count  Five-year change in average share count 
   D.R. Horton Inc.              DHI                                        -3%                                     -11% 
   Lennar Corp. Class A          LEN                                        -2%                                     -14% 
   NVR Inc.                      NVR                                        -1%                                     -16% 
   PulteGroup Inc.               PHM                                        -6%                                     -22% 
   Toll Brothers Inc.            TOL                                        -4%                                     -27% 
   Taylor Morrison Home Corp.    TMHC                                       -7%                                      -2% 
   Meritage Homes Corp.          MTH                                         1%                                     -10% 
   KB Home                       KBH                                        -7%                                     -18% 
   M.D.C. Holdings Inc.          MDC                                         3%                                      13% 
   Tri Pointe Homes Inc.         TPH                                        -2%                                     -34% 
   Frontdoor Inc.                FTDR                                        0%                                      -3% 
   Cavco Industries Inc.         CVCO                                       -3%                                      -5% 
   M/I Homes Inc.                MHO                                         0%                                      -2% 
   LGI Homes Inc.                LGIH                                       -1%                                      -6% 
   Century Communities Inc.      CCS                                        -3%                                       7% 
   Green Brick Partners Inc.     GRBK                                       -5%                                     -10% 
   Patrick Industries Inc.       PATK                                      -11%                                     -11% 
                                                                                                         Source: FactSet 

Favorite industry stocks

The Oppenheimer analysts' "top pick in the space" is PulteGroup, for which their price target is $110, which is 46% above the stock's closing price of $75.59 on Wednesday. They also have outperform ratings on Toll Brothers Inc. (TOL) and Tri Pointe Homes Inc. (TPH). For Toll Brothers, their price target is $110, which is 47% above the closing price of $75.04 on Wednesday. For Tri Pointe, their price target is $36, which is 31% above Wednesday's closing price of $27.56.

Leaving the 17 stocks in the same order, here's a summary of ratings and price targets among analysts polled by FactSet:

   Home builder                 Ticker   Share buy ratings  Share neutral ratings  Share sell ratings  No. of analysts polled by FactSet  Oct. 11 price  Consensus price target  Implied 12-month upside potential 
   D.R. Horton Inc.              DHI                   64%                    32%                  4%                                 22        $108.67                 $143.35                                32% 
   Lennar Corp. Class A          LEN                   71%                    19%                 10%                                 21        $114.27                 $140.88                                23% 
   NVR Inc.                      NVR                   25%                    62%                 13%                                  8      $6,178.66               $6,685.00                                 8% 
   PulteGroup Inc.               PHM                   81%                    19%                  0%                                 16         $75.59                  $97.20                                29% 
   Toll Brothers Inc.            TOL                   58%                    32%                 10%                                 19         $75.40                  $93.77                                24% 
   Taylor Morrison Home Corp.    TMHC                  22%                    78%                  0%                                  9         $42.97                  $53.40                                24% 
   Meritage Homes Corp.          MTH                   55%                    45%                  0%                                 11        $119.27                 $170.57                                43% 
   KB Home                       KBH                   44%                    50%                  6%                                 16         $45.71                  $56.25                                23% 
   M.D.C. Holdings Inc.          MDC                   33%                    50%                 17%                                  6         $40.75                  $52.13                                28% 
   Tri Pointe Homes Inc.         TPH                   71%                    29%                  0%                                  7         $27.56                  $38.33                                39% 
   Frontdoor Inc.                FTDR                  43%                    43%                 14%                                  7         $31.48                  $40.20                                28% 
   Cavco Industries Inc.         CVCO                 100%                     0%                  0%                                  3        $273.39                 $374.67                                37% 
   M/I Homes Inc.                MHO                  100%                     0%                  0%                                  1         $83.65                 $116.00                                39% 
   LGI Homes Inc.                LGIH                  33%                    50%                 17%                                  6         $97.65                 $128.25                                31% 
   Century Communities Inc.      CCS                   50%                    25%                 25%                                  4         $64.37                  $79.83                                24% 
   Green Brick Partners Inc.     GRBK                   0%                   100%                  0%                                  4         $41.73                  $52.50                                26% 
   Patrick Industries Inc.       PATK                  72%                    14%                 14%                                  7         $73.66                  $93.71                                27% 
                                                                                                                                                                                                   Source: FactSet 

Don't miss: Dividend stocks are dirt cheap. It may be time to back up the truck.

-Philip van Doorn

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10-14-23 1007ET

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