Meritage Homes (NYSE:MTH) Trading Down 5.1% – Should You Sell?

Shares of Meritage Homes Co. (NYSE:MTH) dropped 5.1% on Friday . The company traded as low as $168.11 and last traded at $168.36. Approximately 191,241 shares traded hands during trading, a decline of 53% from the average daily volume of 406,387 shares. The stock had previously closed at $177.45.

Wall Street Analyst Weigh In

A number of equities research analysts have commented on MTH shares. Keefe, Bruyette & Woods reduced their target price on Meritage Homes from $210.00 to $198.00 and set a “market perform” rating for the company in a report on Tuesday, November 5th. Wedbush upgraded shares of Meritage Homes from an “underperform” rating to a “neutral” rating and raised their price objective for the company from $160.00 to $195.00 in a research note on Tuesday, October 15th. StockNews.com downgraded shares of Meritage Homes from a “hold” rating to a “sell” rating in a report on Friday. The Goldman Sachs Group raised shares of Meritage Homes from a “neutral” rating to a “buy” rating and increased their target price for the company from $205.00 to $235.00 in a report on Thursday, October 31st. Finally, JPMorgan Chase & Co. reiterated a “neutral” rating and set a $197.00 price target (down from $220.00) on shares of Meritage Homes in a research report on Friday. One equities research analyst has rated the stock with a sell rating, five have issued a hold rating and four have issued a buy rating to the stock. According to MarketBeat.com, the stock has an average rating of “Hold” and an average price target of $215.14.

Meritage Homes Price Performance

The company has a debt-to-equity ratio of 0.26, a quick ratio of 1.75 and a current ratio of 1.75. The stock has a market capitalization of $6.09 billion, a PE ratio of 7.62 and a beta of 1.82. The company’s fifty day simple moving average is $186.74 and its two-hundred day simple moving average is $184.91.

Meritage Homes’s stock is scheduled to split before the market opens on Friday, January 3rd. The 2-1 split was announced on Monday, November 25th. The newly created shares will be distributed to shareholders after the closing bell on Tuesday, December 31st.

Meritage Homes (NYSE:MTH) last posted its earnings results on Tuesday, October 29th. The construction company reported $5.34 earnings per share (EPS) for the quarter, beating analysts’ consensus estimates of $5.05 by $0.29. The firm had revenue of $1.59 billion for the quarter, compared to analyst estimates of $1.58 billion. Meritage Homes had a return on equity of 16.89% and a net margin of 12.63%. Meritage Homes’s revenue was down 1.5% on a year-over-year basis. During the same quarter in the prior year, the company earned $5.98 EPS. As a group, sell-side analysts predict that Meritage Homes Co. will post 21.27 EPS for the current year.

Meritage Homes Announces Dividend

The business also recently disclosed a quarterly dividend, which will be paid on Tuesday, December 31st. Investors of record on Tuesday, December 17th will be given a dividend of $0.75 per share. This represents a $3.00 dividend on an annualized basis and a yield of 1.78%. The ex-dividend date of this dividend is Tuesday, December 17th. Meritage Homes’s dividend payout ratio is presently 13.58%.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently added to or reduced their stakes in MTH. State Street Corp grew its holdings in shares of Meritage Homes by 4.4% during the third quarter. State Street Corp now owns 1,773,609 shares of the construction company’s stock worth $363,714,000 after buying an additional 74,422 shares in the last quarter. Earnest Partners LLC boosted its position in Meritage Homes by 2.5% during the second quarter. Earnest Partners LLC now owns 718,607 shares of the construction company’s stock worth $116,307,000 after acquiring an additional 17,843 shares during the last quarter. Charles Schwab Investment Management Inc. grew its stake in Meritage Homes by 1.2% in the 3rd quarter. Charles Schwab Investment Management Inc. now owns 489,035 shares of the construction company’s stock worth $100,286,000 after acquiring an additional 5,732 shares during the period. Westfield Capital Management Co. LP raised its holdings in Meritage Homes by 26.9% in the 3rd quarter. Westfield Capital Management Co. LP now owns 483,159 shares of the construction company’s stock valued at $99,081,000 after acquiring an additional 102,502 shares during the last quarter. Finally, FMR LLC lifted its stake in shares of Meritage Homes by 75.1% during the 3rd quarter. FMR LLC now owns 347,227 shares of the construction company’s stock worth $71,206,000 after purchasing an additional 148,898 shares during the period. 98.44% of the stock is currently owned by hedge funds and other institutional investors.

Meritage Homes Company Profile

Meritage Homes Corporation, together with its subsidiaries, designs and builds single-family attached and detached homes in the United States. The company operates through two segments, Homebuilding and Financial Services. It acquires and develops land; and constructs, markets, and sells homes for entry-level and first move-up buyers in Arizona, California, Colorado, Utah, Texas, Florida, Georgia, North Carolina, South Carolina, and Tennessee.