Here's How Much You'd Have If You Invested $1000 in Lennar a Decade Ago
For most investors, how much a stock's price changes over time is important. Not only can it impact your investment portfolio, but it can also help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Lennar (LEN) ten years ago? It may not have been easy to hold on to LEN for all that time, but if you did, how much would your investment be worth today?
Lennar's Business In-Depth
With that in mind, let's take a look at Lennar's main business drivers.
Founded in 1954 and based in Miami, FL, Lennar Corporation is engaged in homebuilding and financial services in the United States. The company’s reportable segments consist of Homebuilding, Lennar Financial Services, Rialto and Lennar Multifamily.
Despite the varied product portfolio, homebuilding remains Lennar’s core business. Homebuilding operations (accounting for 95.4% of fiscal 2023 total revenues) include the sale and construction of single-family attached and detached homes as well as the purchase, development and sale of residential land directly and through unconsolidated entities.
Lennar’s reportable homebuilding segments consist of Homebuilding East, which covers Florida, Georgia, Maryland, New Jersey, North Carolina, South Carolina and Virginia; Homebuilding Central covers Arizona, Colorado and Texas; Homebuilding West covers California and Nevada; Homebuilding Other covers Illinois, Indiana, Minnesota, Oregon, Tennessee, Utah and Washington. However, Homebuilding Other is not considered a reportable segment.
The Financial Services business (2.9%) includes mortgage financing, title insurance and closing services to the company’s homebuyers as well as others through Lennar’s financial services subsidiaries — Universal American Mortgage Company and Eagle Home Mortgage.
Lennar Multi-Family (1.7%) is involved in the development, construction and property management of multi-family rental apartments in premium markets of California through unconsolidated entities.
Lennar & Other (0.1%) includes operations primarily from the company's share of carried interests in Rialto fund investments, retained after the sale of Rialto's asset and investment management platform, along with equity in earnings/loss from Rialto fund investments and strategic technology investments, including other income (expense).
Bottom Line
Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Lennar ten years ago, you're likely feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in October 2014 would be worth $4,884.57, or a gain of 388.46%, as of October 2, 2024, and this return excludes dividends but includes price increases.
The S&P 500 rose 193.33% and the price of gold increased 110.39% over the same time frame in comparison.
Looking ahead, analysts are expecting more upside for LEN.
Lennar’s shares have underperformed the industry in the year-to-date period. The company’s fiscal third-quarter earnings slipped and gross margin declined due to lower revenues per square foot and higher land costs year over year. Lennar expects lower deliveries and home prices and a flat gross margin in the fiscal fourth quarter. Earnings estimates for the fiscal fourth quarter have declined to $4.44 per share from $4.73 in the past seven days, indicating a 14.1% year-over-year decline. Revenues are also likely to decline 4.8% from the prior year. That said, Lennar’s solid operating strategy, which focuses on consistent production and sales pace, bodes well. Furthermore, its focus on reducing construction costs and land-light strategy is likely to foster its growth in the upcoming period.
The stock has jumped 5.56% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2024; the consensus estimate has moved up as well.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Lennar Corporation (LEN) : Free Stock Analysis Report