M/I Homes was initially published as one of our 7investing Community's New Ideas in October 2024

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Background

The following comes directly from our initial Community recommendation. 7investing's opinions may differ from the person(s) who submitted this community research.

M/I Homes (MHO) has by far been one of the best performers in my portfolio. It’s 4x’d in the past 5 years and yet its P/E ratio is still under 9.

With the home supply crunch continuing, this mid American home builder is poised to continue to grow. It has stable long-term leadership, double digit ROIC and ROA, and a net profit margin of 13%. 4x is a lot, but at a p/e of under 9, I think it’s still got running room.

Company Updates

The following comes directly from our initial Community recommendation. 7investing's opinions may differ from the person(s) who submitted this community research.

January 29, 2025:

M/I Homes (MHO) just reported their Q4 2024 numbers and there's a lot to like:

• Record fourth quarter homes delivered and income
• New contracts increased 11% to 1,759
• Homes delivered increased 19% to 2,402
• Revenue of $1.2 billion, up 24%
• Pre-tax income of $171 million, up 24%
• Net income increased 27% to $133.5 million ($4.71 per diluted share) compared to $105 million ($3.66 per diluted share) in 2023
• Repurchased $50 million of stock

2024 Full Year Results:

• Record homes delivered, revenue and income
• New contracts increased 8% to 8,584
• Homes delivered increased 12% to 9,055
• Revenue increased 12% to $4.5 billion
• Pre-tax income increased 21% to $734 million; 16% of revenue
• Net income increased 21% to $564 million ($19.71 per diluted share)
• Shareholders' equity reached an all-time record of $2.9 billion, a 17% increase from a year ago, with book value per share of $109
• Repurchased $176 million of stock
• Return on equity of 21%

My favorite stat is that they've currently got a backlog of 2,531 units, with a sales value of $1.4 billion. The company itself is valued at about $4 billion.

Share prices have dropped since its peak last year. But the company is strong, it's buying back shares ($176 million in 2024), and I think it will continue to crawl upwards despite macro headwinds that have weighed on its price.

It's a tortoise in a race full of hares, for sure, but every portfolio needs a few of those... right?