Meritage Homes (NYSE:MTH) Hits New 52-Week Low - Here's Why

Key Points

• Meritage Homes shares fell to a new 52-week low of $58.03, well below their 50-day and 200-day moving averages of $67.73 and $68.87, respectively.
• Analyst sentiment is mixed but leans cautious: the consensus rating is “Hold” with a $73.56 target price, while Zacks Research downgraded the stock to “strong sell” and Melius Research initiated coverage with a “sell” rating and a $59 target.
• Although quarterly EPS of $1.42 exceeded expectations, revenue declined 14.1% year over year to $1.41 billion and EPS fell from $2.04 in the prior-year quarter. The company continues to pay a $0.48 quarterly dividend, yielding about 3.3%.

Meritage Homes Corporation (NYSE:MTH - Get Free Report) shares hit a new 52-week low during mid-day trading on Monday. The stock traded as low as $58.03 and last traded at $58.20, with a volume of 630 shares traded. The stock had previously closed at $58.81.

Analyst Ratings Changes

MTH has been the topic of several recent research reports. The Goldman Sachs Group set a $82.00 price objective on shares of Meritage Homes in a research report on Monday. Zacks Research downgraded shares of Meritage Homes from a "hold" rating to a "strong sell" rating in a report on Thursday. Citigroup reissued a "market outperform" rating on shares of Meritage Homes in a research note on Monday, July 6th. Melius Research initiated coverage on shares of Meritage Homes in a research note on Tuesday, October 6th. They set a "sell" rating and a $59.00 target price on the stock. Finally, Weiss Ratings cut shares of Meritage Homes from a "hold (c+)" rating to a "hold (c)" rating in a report on Friday, September 18th. Four investment analysts have rated the stock with a Buy rating, seven have issued a Hold rating and two have assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock has a consensus rating of "Hold" and a consensus target price of $73.56.

Meritage Homes Stock Performance

The company has a debt-to-equity ratio of 0.37, a quick ratio of 1.97 and a current ratio of 1.97. The stock has a market cap of $3.78 billion, a P/E ratio of 12.18, a P/E/G ratio of 4.37 and a beta of 1.33. The firm has a 50 day moving average of $67.73 and a two-hundred day moving average of $68.87.

Meritage Homes (NYSE:MTH - Get Free Report) last posted its quarterly earnings data on Wednesday, July 29th. The construction company reported $1.42 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.30 by $0.12. Meritage Homes had a net margin of 6.11% and a return on equity of 7.13%. The company had revenue of $1.41 billion for the quarter, compared to the consensus estimate of $1.43 billion. During the same quarter in the previous year, the firm posted $2.04 EPS. The business's revenue was down 14.1% compared to the same quarter last year. On average, research analysts predict that Meritage Homes Corporation will post 4.97 EPS for the current fiscal year.

Meritage Homes Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Wednesday, September 30th. Investors of record on Tuesday, September 15th were given a dividend of $0.48 per share. This represents a $1.92 annualized dividend and a dividend yield of 3.3%. The ex-dividend date was Tuesday, September 15th. Meritage Homes's dividend payout ratio (DPR) is 40.17%.

Institutional Investors Weigh In On Meritage Homes

A number of large investors have recently bought and sold shares of the business. Bamco Inc. NY bought a new stake in shares of Meritage Homes during the 2nd quarter worth approximately $112,498,000. Bank of New York Mellon Corp bought a new position in Meritage Homes during the 2nd quarter worth $68,873,000. Vaughan Nelson Investment Management L.P. lifted its holdings in shares of Meritage Homes by 16.3% during the first quarter. Vaughan Nelson Investment Management L.P. now owns 675,770 shares of the construction company's stock worth $41,790,000 after buying an additional 94,570 shares in the last quarter. Algert Global LLC grew its stake in shares of Meritage Homes by 267.8% in the second quarter. Algert Global LLC now owns 356,121 shares of the construction company's stock valued at $29,861,000 after acquiring an additional 259,291 shares in the last quarter. Finally, SummitTX Capital L.P. raised its stake in Meritage Homes by 16.1% in the 1st quarter. SummitTX Capital L.P. now owns 471,614 shares of the construction company's stock worth $29,165,000 after purchasing an additional 65,540 shares in the last quarter. 98.44% of the stock is currently owned by institutional investors.

Meritage Homes Company Profile

Meritage Homes Corporation is a residential construction company that designs and builds single-family homes in the United States. The company primarily serves entry-level and first-time move-up buyers, offering homes in a range of floor plans, sizes and price points. Its communities typically feature energy-efficient designs and include standard features intended to improve home performance, comfort and affordability.

Meritage Homes develops communities in selected markets across the South, Southeast and West, including areas of Arizona, California, Colorado, Florida, Georgia, North Carolina, South Carolina, Tennessee and Texas.

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