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This Recent Homebuilder IPO Is Soaring on Monday

By Matthew Frankel, CFP® - Feb 1, 2021 at 3:09PM

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After being public for less than two weeks, this builder is already making big moves.

What happened

The stock market was having a strong day on Monday, but Dream Finders Homes (DFH 1.69%), a homebuilder that went public less than two weeks ago, is a standout. As of 2:30 p.m. EST, Dream Finders was up by more than 12% for the day and was trading at its highest share price since going public.

So what

Dream Finders' big news item of the day is the acquisition of Orlando-based Century Homes Florida. And while there's quite a bit we don't know about the deal (including how much Dream Finders paid), this is certainly a big deal for the company.

Builder standing in a construction site.

Image source: Getty Images.

Dream Finders is one of the fastest-growing homebuilders in the United States, with 54% year-over-year growth in 2020 and with a presence in some of the most promising housing markets in the Sunbelt region. And this acquisition should keep the momentum going. Century Homes Florida has built more than 1,000 homes, compared with the 9,000 homes Dream Finders has completed in its 12-year history. So, this is certainly a needle-moving acquisition.

One of the big differentiators of Dream Funders is its asset-light homebuilding model under which it maintains options on land but doesn't acquire lots until it is ready to build homes. This has allowed the company to grow rapidly while achieving returns on equity well above the industry average.

Now what

This is just the latest acquisition for Dream Finders, which acquired North Carolina-based H&H Homes in 2020. The company is growing at a fast pace, and it doesn't look like it's planning to slow down anytime soon.

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Dream Finders Homes, Inc. Stock Quote
Dream Finders Homes, Inc.
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