Fundamentally Sound With An Added Perk: D.R. Horton

| About: D. R. (DHI)

D.R. Horton Inc (NYSE:DHI) builds single-family detached homes for first-time and move-up home buyers in 25 states and 73 metropolitan markets. Over the past three years, this company has an earnings growth rate of 364% and a sales growth rate of 2%- but 41% in the last quarter. The company also generates a dividend yield of 0.6%

Even more impressive is the fact that there have been significant positive earnings surprises in the past five reports, as shown in the chart below:

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Analysts have been so impressed that growth projections have been bullish and that trend has continued as shown below:

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Why this is a strong candidate for your portfolio:

  • DHI is in the top 20% of all stocks on U.S. exchanges regarding earnings per share growth
  • DHI is in the top 15% in price performance
  • DHI's industry performance ranks in the top 5% of all industries

The added perk:

There is an added bonus to this fundamentally sound equity. DHI is a stock on The Blue Collar Investor watch list of eligible candidates for covered call writing. This means that in addition to potential share appreciation, additional profits can be generated by selling out-of-the-money call options. Let's look at a current 1-month options chain as the stock trades at $23.35:

Selling the $24 call option will generate an additional 2.8% over the next 6 weeks and allow share appreciation up to $24. Selling the $25 call option will generate an additional 1.5% over the next 6 weeks and allow for share appreciation up to $25.


Because of its strong fundamentals and strong growth projections, DHI is a strong candidate for consideration in your portfolio. In addition to great fundamentals, DHI options offer the added benefit of a second income stream by selling out-of-the-money call options to bolster profits.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in DHI over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.