A Look at Meritage Homes (MTH) Valuation After Dividend Hike and New Share Buyback Program

Meritage Homes (MTH) announced a new quarterly cash dividend of $0.43 per share and highlighted significant year-to-date share repurchases. In addition, management plans $100 million in buybacks each quarter during 2026.

See our latest analysis for Meritage Homes.

Meritage Homes has seen its share price retreat recently, with a 1-month share price return of -8.0% and a year-to-date decline of -13.6%. Despite this, the company’s three- and five-year total shareholder returns of 60.1% and 49.6% indicate that long-term holders are still well ahead. However, momentum has faded following the latest dividend and buyback news.

If shareholder returns and buyback activity have you reassessing the landscape, it could be an ideal time to broaden your search and discover fast growing stocks with high insider ownership

With shares now trading about 26% below analyst targets and an intrinsic discount of nearly 20%, the question arises: is Meritage Homes undervalued and positioned for potential upside, or is the market anticipating slower growth ahead?

Most Popular Narrative: 20.5% Undervalued

With a narrative fair value set at $82.63 and Meritage Homes last closing at $65.68, the most widely followed view points to upside potential. This gap is raising investor eyebrows and centers the conversation around what's driving such a valuation call.

Continued improvements in construction cycle times (down to ~110 days per home) and operational efficiencies, driven by process standardization and leveraging technological advancements, reduce build costs and working capital needs. This structurally enhances gross margins and boosts future net income.

Read the complete narrative.

Want to know what’s fueling this premium price tag? One bold quantitative forecast anchors this bull case, but there’s a hidden assumption involving profit margins and an aggressive future multiple that is not usually assigned to homebuilders. Discover what makes analysts buck the market trend and see the underlying numbers that tip the scales in favor of Meritage Homes.

Result: Fair Value of $82.63 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent affordability challenges or sudden demand slowdowns could quickly undermine these optimistic assumptions about future growth and margins.

Find out about the key risks to this Meritage Homes narrative.

Build Your Own Meritage Homes Narrative

If you see things differently or want to dig into the numbers on your own, crafting a personal take is quick and only takes a few minutes. So why not Do it your way

A great starting point for your Meritage Homes research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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