A good housing market is helping to pump up the results of home builder D.R. Horton (NYSE:DHI). The company reported a Q1 2016 that came in above expectations -- net sales rose by 12% on a year-over-year basis to just over $2.4 billion, while net income grew 11% to nearly $158 million ($0.42 per diluted share).
Those figures came in slightly ahead of the average analyst estimates, which anticipated a top line of $2.36 billion, and per-share net profit of $0.41.
Meanwhile, there's clearly more where that came from; D.R. Horton's order backlog saw a 16% increase, to total $3.2 billion.
The company also declared a fresh quarterly dividend of $0.08 per share. It matches the previous dividend, and will be paid on Feb. 17 to shareholders of record as of Feb. 5.
Does it matter?
D.R. Horton is the largest home builder in the country, so it's a key beneficiary of a rising housing market. According to government statistics, housing starts totaled just over 1.1 million in December, 6% higher on a year-over-year basis. A growing economy is supporting the classic American dream; people want to own houses, and more have the means to afford them.
The uptick in the housing market has been in force for some time now, so we can't consider D.R. Horton's quarterly improvement to be a great, stock price-moving surprise. A similar pattern can be seen in other companies associated with construction. For example, both Home Depot (NYSE:HD) and Lowe's (NYSE:LOW) saw year-over-year lifts in both top and bottom lines in their most recently reported quarters.
Like D.R. Horton with its growing backlog, Home Depot can look forward to more growth in the near future -- the company believes per-share earnings will end up 14% higher this fiscal year. And in anticipation of a busy warm-weather building season, Lowe's announced that it will hire around 46,000 seasonal employees to help staff its stores this spring and summer.
The stock market might be rocky these days, but the housing industry is not. D.R. Horton (plus Home Depot and Lowe's, by extension) should have a busy 2016, especially now that we're not far away from peak building season.