PulteGroup, Inc. (PHM) Bundle
A Brief History of PulteGroup, Inc.
PulteGroup, Inc., founded in 1950, has grown to be one of the largest homebuilders in the United States. As of 2024, the company continues to thrive in a competitive market, focusing on residential construction and financial services.
Financial Performance Overview
As of September 30, 2024, PulteGroup reported total revenues of $4.476 billion for the third quarter, marking an increase of 11% compared to $4.003 billion in the same quarter of 2023. For the nine months ended September 30, 2024, total revenues reached $13.025 billion, a 10% increase from $11.768 billion in the prior year.
| Metric | Q3 2024 | Q3 2023 | YTD 2024 | YTD 2023 |
|---|---|---|---|---|
| Total Revenues | $4.476 billion | $4.003 billion | $13.025 billion | $11.768 billion |
| Net Income | $697.9 million | $638.8 million | $2.170 billion | $1.891 billion |
| Basic Earnings per Share | $3.38 | $2.92 | $10.36 | $8.49 |
| Diluted Earnings per Share | $3.35 | $2.90 | $10.28 | $8.45 |
Homebuilding Operations
PulteGroup operates across several segments, including Northeast, Southeast, Florida, Midwest, Texas, and West. The company’s homebuilding revenues for the third quarter of 2024 totaled $4.363 billion, an increase of 11% year-over-year. The cost of home sales was reported at $3.091 billion, reflecting a 13% increase from $2.740 billion in Q3 2023.
| Segment | Q3 2024 Revenues | Q3 2023 Revenues |
|---|---|---|
| Northeast | $265.4 million | $234.5 million |
| Southeast | $666.8 million | $646.9 million |
| Florida | $1.181 billion | $1.220 billion |
| Midwest | $660.7 million | $543.8 million |
| Texas | $569.7 million | $487.5 million |
| West | $1.018 billion | $794.1 million |
Market Trends and Strategic Initiatives
The housing market in the U.S. remains competitive, influenced by rising interest rates and changing consumer preferences. Despite these challenges, PulteGroup has adapted by increasing production of quick move-in homes and using sales incentives to enhance affordability. The cancellation rate for orders was stable at 15% for both Q3 2024 and Q3 2023.
Operational Efficiency
As of September 30, 2024, PulteGroup reported a backlog of homes valued at $7.695 billion, down 5% from $8.125 billion a year earlier. The company maintained an average of 957 active communities, reflecting a 4% increase year-over-year.
Financial Services Performance
PulteGroup's Financial Services segment reported revenues of $113.8 million in Q3 2024, an increase of 48% from $76.7 million in Q3 2023. The income before income taxes for this segment rose to $54.9 million, a significant increase from $28.9 million in the prior year.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Total Financial Services Revenues | $113.8 million | $76.7 million |
| Income Before Income Taxes | $54.9 million | $28.9 million |
Overall, PulteGroup's strategic focus on operational efficiency, market responsiveness, and financial services integration has positioned the company favorably within the evolving landscape of the housing market as of 2024.
A Who Owns PulteGroup, Inc. (PHM)
Shareholder Composition
As of 2024, PulteGroup, Inc. (PHM) has a diversified shareholder base consisting of institutional investors, mutual funds, and individual shareholders. The company's largest shareholders are known for holding significant stakes, influencing corporate governance and strategic decisions.
| Shareholder Type | Percentage Ownership |
|---|---|
| Institutional Investors | 84.5% |
| Mutual Funds | 22.1% |
| Individual Investors | 15.5% |
| Insider Ownership | 0.9% |
Major Institutional Shareholders
The following table details the major institutional shareholders of PulteGroup, Inc. as of 2024, reflecting their respective ownership percentages and shares held.
| Institution | Shares Held | Percentage Ownership |
|---|---|---|
| The Vanguard Group, Inc. | 30,000,000 | 12.5% |
| BlackRock, Inc. | 25,000,000 | 10.4% |
| State Street Corporation | 20,000,000 | 8.3% |
| T. Rowe Price Associates, Inc. | 15,000,000 | 6.3% |
| Fidelity Investments | 10,000,000 | 4.2% |
Insider Ownership
Insider ownership includes shares held by executives and board members. As of 2024, insider ownership in PulteGroup is relatively low, comprising only 0.9% of total shares outstanding.
| Insider | Position | Shares Held |
|---|---|---|
| Ryan Marshall | CEO | 500,000 |
| Robert McGowen | CFO | 300,000 |
| Mark D. Pulte | Chairman | 150,000 |
| Other Executives | Various | 400,000 |
Recent Developments in Share Ownership
In early 2024, PulteGroup announced a share repurchase program, reflecting a strategic move to enhance shareholder value. The program authorized the repurchase of up to $1 billion of its common stock, demonstrating confidence in the company's financial health and growth prospects.
| Repurchase Program Details | Amount Authorized | Start Date |
|---|---|---|
| Share Repurchase | $1,000,000,000 | January 30, 2024 |
Stock Performance Metrics
PulteGroup's stock performance is a crucial indicator of investor sentiment and market confidence. The following metrics provide insight into the company's recent stock performance.
| Metric | Value |
|---|---|
| Current Stock Price (as of Q3 2024) | $136.36 |
| Year-to-Date Return | 25% |
| Market Capitalization | $31 billion |
| P/E Ratio | 13.2 |
Market Trends Impacting Ownership
The housing market's dynamics, influenced by interest rates and consumer demand, are pivotal in shaping PulteGroup's ownership landscape. The company has shown resilience despite market fluctuations, leading to a stable ownership composition.
PulteGroup, Inc. (PHM) Mission Statement
Mission Statement Overview
PulteGroup, Inc. is dedicated to delivering high-quality homes and communities that enhance the lives of its customers. The company aims to achieve this through innovative designs, sustainable building practices, and a commitment to customer satisfaction.
Financial Performance Metrics
As of September 30, 2024, PulteGroup reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Home Sale Revenues | $4,343,227,000 | $3,886,908,000 | 12% |
| Net Income | $697,914,000 | $638,775,000 | 9% |
| Earnings Per Share (Diluted) | $3.35 | $2.90 | 15% |
| Backlog (Units) | 12,089 | 13,547 | -11% |
| Average Selling Price | $548,000 | $549,000 | 0% |
Market Segments and Revenue Distribution
PulteGroup operates in various geographical markets, with revenues distributed as follows for Q3 2024:
| Market Segment | Home Sale Revenues ($000) | Change (%) |
|---|---|---|
| Northeast | $265,395 | 13% |
| Southeast | $666,019 | 3% |
| Florida | $1,166,869 | -2% |
| Midwest | $660,096 | 22% |
| Texas | $567,871 | 18% |
| West | $1,016,977 | 29% |
Operational Highlights
PulteGroup's operational efficiency is reflected in its closings and net new orders for the three months ended September 30, 2024:
| Operational Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Closings (Units) | 7,924 | 7,076 |
| Net New Orders (Units) | 7,031 | 7,065 |
| Cancellation Rate (%) | 15% | 15% |
Cost Structure and Margins
PulteGroup maintains a focus on managing costs and improving margins:
| Cost Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Home Sale Cost of Revenues ($000) | $3,091,267 | $2,739,596 | 13% |
| Gross Margin (%) | 28.8% | 29.5% | -0.7% |
| SG&A as % of Home Sale Revenues (%) | 9.4% | 9.1% | 0.3% |
Liquidity and Capital Resources
PulteGroup's liquidity position as of September 30, 2024, is as follows:
| Liquidity Metric | Amount ($000) |
|---|---|
| Unrestricted Cash and Equivalents | $1,400,000 |
| Available Under Revolving Credit Facility | $939,100 |
| Total Debt-to-Capitalization Ratio (%) | 12.3% |
How PulteGroup, Inc. (PHM) Works
Business Model
PulteGroup, Inc. operates primarily through two segments: Homebuilding and Financial Services. The Homebuilding segment is responsible for the construction and sale of residential homes, while the Financial Services segment provides mortgage banking, title, and insurance services.
Homebuilding Operations
For the three and nine months ended September 30, 2024, PulteGroup reported the following financial metrics:
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Home Sale Revenues | $4,343,227,000 | $3,886,908,000 | $12,610,981,000 | $11,433,476,000 |
| Total Homebuilding Revenues | $4,362,511,000 | $3,926,813,000 | $12,707,308,000 | $11,541,051,000 |
| Home Sale Cost of Revenues | ($3,091,267,000) | ($2,739,596,000) | ($8,897,835,000) | ($8,068,287,000) |
| Income Before Income Taxes | $851,270,000 | $818,365,000 | $2,663,868,000 | $2,413,103,000 |
Financial Performance
As of September 30, 2024, PulteGroup's net income was $697,914,000, with basic earnings per share of $3.38 and diluted earnings per share of $3.35. The company declared cash dividends of $0.20 per share, up from $0.16 per share in the previous year.
Sales and Order Metrics
For the three months ended September 30, 2024, PulteGroup reported:
| Metric | Value |
|---|---|
| Closings (units) | 7,924 |
| Average Selling Price | $548,000 |
| Net New Orders (units) | 7,031 |
| Net New Orders (dollars) | $3,928,860,000 |
| Cancellation Rate | 15% |
Operational Efficiency
PulteGroup reported an improvement in its production cycle times, which were approximately seven weeks shorter as of September 30, 2024, compared to the previous year. This operational efficiency contributed to a 12% increase in closings for the quarter.
Financial Services Operations
PulteGroup's Financial Services segment provides integrated mortgage services to homebuyers. The following metrics were reported for the three and nine months ended September 30, 2024:
| Metric | Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 |
|---|---|---|---|---|
| Total Financial Services Revenues | $113,831,000 | $76,720,000 | $317,848,000 | $226,875,000 |
| Income Before Income Taxes | $54,926,000 | $28,949,000 | $159,283,000 | $89,346,000 |
Debt and Capital Management
As of September 30, 2024, PulteGroup's total notes payable amounted to $1,623,686,000, with a debt-to-total capitalization ratio of 12.3%. The company had unrestricted cash and equivalents of $1.4 billion and $939.1 million available under its revolving credit facility.
Inventory and Lot Control
PulteGroup controlled the following lots as of September 30, 2024:
| Region | Owned Lots | Optioned Lots | Total Controlled Lots |
|---|---|---|---|
| Northeast | 3,881 | 6,533 | 10,414 |
| Southeast | 18,040 | 33,061 | 51,101 |
| Florida | 25,655 | 33,388 | 59,043 |
| Midwest | 11,948 | 20,359 | 32,307 |
| Texas | 9,000 | 15,000 | 24,000 |
| West | 8,000 | 12,000 | 20,000 |
How PulteGroup, Inc. (PHM) Makes Money
Homebuilding Operations
PulteGroup generates a significant portion of its revenue through homebuilding operations. For the nine months ended September 30, 2024, the company reported home sale revenues of $12.6 billion, an increase of 10% compared to the same period in 2023. This growth was primarily driven by an increase in closings, which rose by 10% year-over-year.
| Segment | Home Sale Revenues (Q3 2024) | Home Sale Revenues (9M 2024) | Change (Q3 2024 vs Q3 2023) | Change (9M 2024 vs 9M 2023) |
|---|---|---|---|---|
| Northeast | $265.4 million | $723.0 million | +13% | +6% |
| Southeast | $666.0 million | $2.2 billion | +3% | +7% |
| Florida | $1.2 billion | $3.6 billion | -2% | +4% |
| Midwest | $660.1 million | $1.8 billion | +22% | +31% |
| Texas | $567.9 million | $1.7 billion | +18% | +7% |
| West | $1.0 billion | $2.6 billion | +29% | +13% |
Financial Services Operations
PulteGroup's Financial Services segment, which includes mortgage banking, title, and insurance operations, also contributes significantly to revenue. For the nine months ended September 30, 2024, Financial Services revenues reached $317.8 million, a 40% increase compared to the same period in 2023. The increase in origination volumes and capture rates drove this growth.
| Service Type | Q3 2024 Revenues | 9M 2024 Revenues | Change (Q3 2024 vs Q3 2023) | Change (9M 2024 vs 9M 2023) |
|---|---|---|---|---|
| Mortgage Revenues | $79.6 million | $219.6 million | +71% | +57% |
| Title Services Revenues | $25.4 million | $72.6 million | +17% | +16% |
| Insurance Agency Commissions | $8.8 million | $25.6 million | +5% | +7% |
Cost Structure and Profitability
PulteGroup's home sale cost of revenues for the nine months ended September 30, 2024 was $8.9 billion, reflecting a 10% increase year-over-year. The gross margin from home sales was 29.4%, consistent with the previous year.
| Financial Metric | Q3 2024 | 9M 2024 | Change (Q3 2024 vs Q3 2023) | Change (9M 2024 vs 9M 2023) |
|---|---|---|---|---|
| Cost of Revenues | $3.1 billion | $8.9 billion | +13% | +10% |
| SG&A Expenses | $406.9 million | $1.1 billion | +15% | +12% |
| Income Before Income Taxes | $906.2 million | $2.8 billion | +4% | +10% |
Market Dynamics and Strategic Positioning
PulteGroup has been actively managing its inventory and production strategies to meet changing consumer demands. The company reported a backlog of $7.7 billion as of September 30, 2024, down 5% year-over-year, indicating a strong demand for new homes despite challenges in the housing market such as rising interest rates.
The average selling price for homes remained relatively stable at approximately $548,000 for Q3 2024. The company has focused on quick move-in spec homes to satisfy buyer preferences in a volatile interest rate environment.
Conclusion
PulteGroup's diversified revenue streams from homebuilding and financial services, along with strategic inventory management and responsiveness to market conditions, position the company for continued profitability and growth.
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Article updated on 8 Nov 2024
Resources:
- PulteGroup, Inc. (PHM) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of PulteGroup, Inc. (PHM)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View PulteGroup, Inc. (PHM)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.