D.R. Horton’s David V. Auld: Barron’s Top CEOs 2022

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America has a big housing shortage, and no company is doing more to address it than

D.R. Horton
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Under David Auld’s leadership, the country’s largest and most profitable home builder has consistently generated impressive financial results, including an outsize return on equity of 34% in the past 12 months. Earnings per share are expected to hit $17 in the company’s fiscal year ending in September, four times the level in fiscal 2019.

Like its peers, Horton has dealt with unprecedented supply disruptions and shortages in the past year—for appliances, windows, duct materials, and even utility meters. That has lengthened the average time needed to construct a house to 6.5 months from 4.5 months.

Still, the company’s on pace to complete about 90,000 homes in the current fiscal year, about a tenth of all single-family homes to be built in the U.S., and up 10% from the prior year. Horton focuses on entry-level homes in the Sunbelt. Only about 10% of its homes cost over $500,000.

Auld, 66, has moved to reduce financial risk by buying more land from others and lowering debt. This puts Horton in a strong position to weather a downturn. Investors are betting on a softer housing market; the stock is down 35% from its late-2021 high, and trades for just four times projected fiscal 2022 earnings.

Auld, who has an accounting background, joined the company in 1988 and has worked his way up the ranks, becoming CEO in 2014. On Horton’s latest conference call, he said the company would continue to return cash to shareholders.

Write to Andrew Bary at [email protected]