COLUMBUS, Ohio - M/I Homes, Inc. (NYSE: NYSE:MHO), a leading national homebuilder, reported a mix of increased contracts and decreased revenue for the fourth quarter and full year ended December 31, 2023. The company saw a 61% surge in new contracts for the quarter, reaching 1,588, while backlog sales value dipped to $1.6 billion from $1.7 billion the previous year.
Despite the uptick in contracts, homes delivered in the fourth quarter fell by 15% to 2,019, contributing to a 20% decline in revenue to $972.6 million. The decrease in homes delivered also affected annual figures, with a 3% drop to 8,112 homes compared to 2022. Consequently, annual revenue decreased by 2% to $4.0 billion.
Net income for the quarter decreased 19% to $105.3 million, or $3.66 per diluted share, compared to $130.4 million, or $4.65 per diluted share, in the same quarter last year. Full-year net income also saw a decrease, down to $465.4 million, or $16.21 per diluted share, from $490.7 million, or $17.24 per diluted share, in 2022.
Despite these challenges, M/I Homes reported a record shareholders' equity of $2.5 billion, a 22% increase from the previous year, and a book value per share of $91. The company's return on equity was 20.2%, and it reduced its homebuilding debt to capital ratio to 22%, down from 25%.
CEO Robert H. Schottenstein attributed the company's strong year to its pre-tax income of $607 million, representing 15% of revenue with gross margins of 25.3%. He noted the significant headwinds faced by the housing industry, including higher interest rates and inflationary pressures.
Looking ahead, Schottenstein expressed confidence in the company's financial position, with zero borrowings under its $650 million credit facility and a record year-end book value. He anticipates continued strong performance based on favorable demographic trends and an undersupply of housing.
This report is based on a press release statement from M/I Homes, Inc.
InvestingPro Insights
In the volatile landscape of the housing market, M/I Homes, Inc. (NYSE: MHO) has shown resilience, as reflected in its financial metrics. With a strong free cash flow yield, the company's valuation suggests that it is generating ample cash relative to its share price. This is an important indicator for investors looking for companies that can sustain or grow their operations without the need for external financing.
Another aspect worth noting is the company's stock performance. M/I Homes has delivered a high return over the last year, with a significant price uptick over the last six months. This performance is indicative of investor confidence and market recognition of the company's financial health and strategic positioning. Additionally, M/I Homes is trading at a low earnings multiple, which could indicate that the stock is undervalued relative to its earnings capacity.
On the financial side, the company's market capitalization stands at $3.76 billion, with a P/E ratio of 7.64, indicating a potentially attractive valuation in the current market. The revenue growth for the last twelve months as of Q3 2023 has been 7.86%, showing the company's ability to increase its sales amid challenging economic conditions.
For those interested in deeper analysis, InvestingPro offers additional insights on M/I Homes, Inc., with a total of 15 InvestingPro Tips that cover various aspects of the company's financial health and market performance. Subscribers can access these tips to make more informed investment decisions. To explore these tips, visit: https://www.investing.com/pro/MHO.
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