SCOTTSDALE, Ariz. - Meritage (NYSE:MTH) Homes Corporation (NYSE: MTH), the fifth-largest public homebuilder in the United States, has declared a two-for-one stock split of its common stock as a stock dividend. Shareholders on record by December 31, 2024, will receive an additional share for each one held, with distribution scheduled after markets close on January 2, 2025. The company's stock will commence trading on a split-adjusted basis from January 3, 2025.
This move comes as Meritage Homes continues to build on its 38-year history, having delivered over 190,000 homes. The company is recognized for its energy-efficient and affordable housing, spanning multiple states, including Arizona, California, and Texas. Meritage's commitment to energy efficiency has been acknowledged through numerous awards, including repeated recognition from the U.S. Environmental Protection Agency (EPA) with the ENERGY STAR Partner of the Year for Sustained Excellence Award and the Indoor airPLUS Leader Award.
The stock split reflects the company's growth and its aim to make stock ownership more accessible to a broader base of investors. Trading on a split-adjusted basis is expected to provide greater liquidity and a more attractive price point for investors.
The information regarding the stock split is based on a press release statement from Meritage Homes Corporation.
In other recent news, Meritage Homes Corporation has been experiencing a series of noteworthy developments. The company demonstrated a robust performance in Q3 2024, with home closing revenue reaching $1.6 billion and a gross margin of 24.8%. Despite a challenging market environment, Meritage Homes recorded 3,512 home orders and successfully delivered 3,942 homes. However, the average selling price saw a 6% year-over-year decrease to $406,000.
Raymond (NS:RYMD) James recently downgraded Meritage Homes' stock from an Outperform rating to Market Perform, citing concerns over housing affordability and potential increases in Federal Housing Administration mortgage premiums. Contrarily, Goldman Sachs (NYSE:GS) upgraded its rating for the company from Neutral to Buy, anticipating Meritage Homes to benefit from housing market dynamics over the next 12-18 months.
Meritage Homes also announced the acquisition of Elliott Homes, expected to strengthen its position in the Gulf Coast markets. The company received the EPA's 2024 Indoor AirPLUS Leader Award and maintained its Great Place to Work certification. Looking forward, Meritage Homes projects closings between 16,500 and 17,500 units with home closing revenue ranging from $6.7 billion to $7.1 billion for the full year 2025. These are some of the recent developments surrounding Meritage Homes Corporation.
InvestingPro Insights
As Meritage Homes Corporation (NYSE: MTH) prepares for its two-for-one stock split, investors may find additional value in examining the company's financial metrics and market performance. According to InvestingPro data, Meritage Homes boasts a market capitalization of $6.67 billion, reflecting its significant presence in the homebuilding industry.
The company's P/E ratio stands at 8.21, suggesting that it may be undervalued relative to its earnings. This aligns with an InvestingPro Tip indicating that Meritage is "trading at a low earnings multiple." However, it's worth noting that another tip points out the stock is "trading at a high P/E ratio relative to near-term earnings growth," with a PEG ratio of 3.83, which investors should consider when evaluating the stock's growth potential.
Meritage Homes has demonstrated strong financial performance, with a revenue of $6.43 billion over the last twelve months as of Q3 2024. The company's profitability is evident, with an operating income margin of 15.49% and a gross profit margin of 25.49% during the same period. These figures support the InvestingPro Tip that the company has been "profitable over the last twelve months."
For investors considering Meritage Homes' long-term performance, it's noteworthy that InvestingPro Tips highlight the company's "high return over the last decade" and "strong return over the last five years." This historical performance, combined with the upcoming stock split, may contribute to increased investor interest and potentially improved liquidity.
It's important to note that InvestingPro offers 10 additional tips for Meritage Homes, providing a more comprehensive analysis for investors looking to make informed decisions in light of the upcoming stock split.
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