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PulteGroup (PHM) Cheers Investors With 7% Dividend Hike

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·3 min read
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  • PHM
  • MTH
  • TPH
  • BZH

In a bid to reward shareholders, PulteGroup, Inc. PHM recently announced a 7.1% hike in its quarterly dividend. The company has been boosting shareholders’ value through regular dividend hikes, share repurchase programs and reinvesting in the business.

On Dec 1, PulteGroup increased its quarterly cash dividend to 15 cents per share from 14 cents paid earlier. The dividend will be payable on Jan 4, 2022 to its shareholders of record as of the close of business on Dec 15.

Since 2018, PulteGroup's board of directors adopted a regular quarterly cash dividend policy. It paid out cash dividends of $135.1 million, $124.4 million and $108.5 million in 2020, 2019 and 2018, respectively. A solid capital allocation strategy — which is a testimony to the company’s stability amid the COVID-19 pandemic — drives long-term sustainable growth and shareholders’ value.

PulteGroup is also highly active on the buyback front. In the first nine months of 2021, the company repurchased 12.0 million shares under its repurchase authorization for $614.3 million. At Sep 30, 2021, it had remaining authorization of $740.6 million shares.

Can PulteGroup Sustain Dividend Hikes?

PulteGroup's business has been banking on improving housing market prospects, accretive land acquisition strategy and focus on growing demand for entry-level homes. During the first nine months of 2021, the company’s adjusted earnings of $4.85 per share increased almost 36.2% year over year on the back of solid demand trends and higher pricing.

Shares of this Zacks Rank #3 (Hold) company have outperformed the Zack Building Products - Home Builders industry in the past year.

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Although, the company has been grappling with rising land and labor costs as well as intense supply chain woes, it expects strong pricing conditions and lower lumber costs to boost gross margin in 2022.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some Top-Ranked Stocks in the Home Building Industry

Beazer Homes USA, Inc. BZH currently sports a Zacks Rank #1. This Atlanta-based homebuilder continues to gain from strong operational execution and persistent strength in the housing market.

Beazer Homes’ shares have gained 35.5% in a year. Earnings are expected to rise 23.7% in fiscal 2022.

TRI Pointe Group Inc. TPH currently sports a Zacks Rank #1. This Irvine, CA-based homebuilder designs, constructs and sells single-family detached and attached homes in the United States. Robust demand and pricing as well as improved operating leverage, have been driving TRI Pointe's performance. Cost-cutting initiatives implemented earlier this year and focus on entry-level buyers have been adding to the positives.

TRI Pointe’s shares have surged 51.5% in the past year. Earnings for 2021 and 2022 are expected to rise 80.2% and 9.6%, respectively.

Meritage Homes Corporation MTH currently sports a Zacks Rank #1. Based in Scottsdale, AZ, Meritage Homes is one of the leading designers and builders of single-family homes. Its focus on entry-level LiVE.NOW homes has been a major driving factor.

MTH has gained 31.1% in a year. Earnings are expected to grow 74.4% in 2021 and 22.2% in the next year.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

PulteGroup, Inc. (PHM) : Free Stock Analysis Report

Meritage Homes Corporation (MTH) : Free Stock Analysis Report

Beazer Homes USA, Inc. (BZH) : Free Stock Analysis Report

Tri Pointe Homes Inc. (TPH) : Free Stock Analysis Report

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