NYSE:TOL

Stock Analysis Report

Executive Summary

Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, sells, and arranges finance for detached and attached homes in luxury residential communities in the United States.

Rewards

PE ratio (11.7x) is below the US market (18.4x)

Earnings are forecast to grow 1.78% per year

Risk Analysis

Debt is not well covered by operating cash flow



Snowflake Analysis

Adequate balance sheet and fair value.


Similar Companies

Share Price & News

How has Toll Brothers's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TOL has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.1%

TOL

1.7%

US Consumer Durables

1.5%

US Market


1 Year Return

29.1%

TOL

35.4%

US Consumer Durables

20.1%

US Market

Return vs Industry: TOL underperformed the US Consumer Durables industry which returned 35.4% over the past year.

Return vs Market: TOL exceeded the US Market which returned 20.1% over the past year.


Shareholder returns

TOLIndustryMarket
7 Day-2.1%1.7%1.5%
30 Day7.7%4.4%1.4%
90 Day19.1%8.2%8.7%
1 Year30.6%29.1%37.3%35.4%22.7%20.1%
3 Year55.9%51.1%37.4%31.2%50.1%40.5%
5 Year32.3%28.2%40.0%30.7%73.1%54.1%

Price Volatility Vs. Market

How volatile is Toll Brothers's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Toll Brothers undervalued compared to its fair value and its price relative to the market?

11.69x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: TOL ($47.58) is trading above our estimate of fair value ($26.05)

Significantly Below Fair Value: TOL is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TOL is good value based on its PE Ratio (11.7x) compared to the Consumer Durables industry average (13.5x).

PE vs Market: TOL is good value based on its PE Ratio (11.7x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: TOL is poor value based on its PEG Ratio (6.6x)


Price to Book Ratio

PB vs Industry: TOL is good value based on its PB Ratio (1.3x) compared to the US Consumer Durables industry average (1.5x).


Next Steps

Future Growth

How is Toll Brothers forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

1.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TOL's forecast earnings growth (1.8% per year) is above the savings rate (1.7%).

Earnings vs Market: TOL's earnings (1.8% per year) are forecast to grow slower than the US market (14.5% per year).

High Growth Earnings: TOL's earnings are forecast to grow, but not significantly.

Revenue vs Market: TOL's revenue (2.9% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: TOL's revenue (2.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TOL's Return on Equity is forecast to be low in 3 years time (8.9%).


Next Steps

Past Performance

How has Toll Brothers performed over the past 5 years?

17.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TOL has high quality earnings.

Growing Profit Margin: TOL's current net profit margins (8.2%) are lower than last year (10.5%).


Past Earnings Growth Analysis

Earnings Trend: TOL's earnings have grown by 17.2% per year over the past 5 years.

Accelerating Growth: TOL's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: TOL had negative earnings growth (-21.1%) over the past year, making it difficult to compare to the Consumer Durables industry average (9.1%).


Return on Equity

High ROE: TOL's Return on Equity (11.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Toll Brothers's financial position?


Financial Position Analysis

Short Term Liabilities: TOL's short term assets ($9.7B) exceed its short term liabilities ($1.6B).

Long Term Liabilities: TOL's short term assets ($9.7B) exceed its long term liabilities ($4.2B).


Debt to Equity History and Analysis

Debt Level: TOL's debt to equity ratio (76.6%) is considered high.

Reducing Debt: TOL's debt to equity ratio has reduced from 87.5% to 76.6% over the past 5 years.

Debt Coverage: TOL's debt is not well covered by operating cash flow (11.2%).

Interest Coverage: TOL earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: TOL has a high level of physical assets or inventory.

Debt Coverage by Assets: TOL's debt is covered by short term assets (assets are 2.5x debt).


Next Steps

Dividend

What is Toll Brothers's current dividend yield, its reliability and sustainability?

0.92%

Current Dividend Yield


Dividend Yield vs Market

company0.9%marketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years0.9%

Current dividend yield vs market & industry

Notable Dividend: TOL's dividend (0.92%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: TOL's dividend (0.92%) is low compared to the top 25% of dividend payers in the US market (3.69%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, TOL has been paying a dividend for less than 10 years.

Growing Dividend: TOL's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (10.8%), TOL's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TOL's dividends in 3 years are forecast to be thoroughly covered by earnings (10.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.2yrs

Average management tenure


CEO

Doug Yearley (59yo)

9.7yrs

Tenure

US$10,744,205

Compensation

Mr. Douglas C. Yearley, Jr., also known as Doug, serves as President at Toll Brothers, Inc. since November 1, 2019. He joined Toll Brothers Inc. in 1990 as an Assistant to the Chief Executive Officer with  ...


CEO Compensation Analysis

Compensation vs Market: Doug's total compensation ($USD10.74M) is above average for companies of similar size in the US market ($USD6.26M).

Compensation vs Earnings: Doug's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Douglas Yearley
Chairman9.7yrsUS$10.74m0.25% $15.3m
Martin Connor
Senior VP & CFO9.4yrsUS$4.13m0.061% $3.8m
Robert Parahus
Executive VP & Co-COO0.3yrsno data0.0029% $181.7k
James Boyd
Executive VP & Co-COO0.3yrsno data0.0067% $420.1k
Michael Grubb
Senior VP & Chief Accounting Officer2.1yrsno data0.0013% $81.2k
John Critikos
Chief Information Officer & Senior VP0yrsno datano data
Frederick Cooper
Senior VP of Finance0yrsno datano data
Wendy Marlett
Chief Marketing Officer0.3yrsno datano data
Joy Roman
Chief Human Resources Officer & Senior VP0yrsno datano data
Joseph DeSanto
Senior Vice President of Tax0yrsno datano data

1.2yrs

Average Tenure

55yo

Average Age

Experienced Management: TOL's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Douglas Yearley
Chairman9.7yrsUS$10.74m0.25% $15.3m
Paul Shapiro
Independent Director26.2yrsUS$266.57k0.086% $5.3m
Christine Garvey
Independent Director10.4yrsUS$246.59k0.0061% $378.3k
Stephen Novick
Independent Director17.1yrsUS$254.97k0.011% $715.4k
Robert Toll
Chairman Emeritus & Special Advisor1.3yrsUS$3.31m8.37% $522.7m
Edward Boehne
Lead Independent Director8.9yrsUS$301.57k0.039% $2.4m
Richard Braemer
Independent Director33.4yrsUS$229.97k0.068% $4.3m
Carl Marbach
Independent Director28.2yrsUS$276.59k0.075% $4.7m
Wendell Pritchett
Independent Director1.9yrsUS$172.77kno data
John McLean
Independent Director3.9yrsUS$239.48k0.0035% $216.0k

9.7yrs

Average Tenure

77yo

Average Age

Experienced Board: TOL's board of directors are considered experienced (9.7 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Toll Brothers, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Toll Brothers, Inc.
  • Ticker: TOL
  • Exchange: NYSE
  • Founded: 1967
  • Industry: Homebuilding
  • Sector: Consumer Durables
  • Market Cap: US$6.243b
  • Shares outstanding: 131.21m
  • Website: https://www.tollbrothers.com

Number of Employees


Location

  • Toll Brothers, Inc.
  • 250 Gibraltar Road
  • Horsham
  • Pennsylvania
  • 19044
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TOLNYSE (New York Stock Exchange)YesCommon StockUSUSDJul 1986
TLKDB (Deutsche Boerse AG)YesCommon StockDEEURJul 1986
0LFSLSE (London Stock Exchange)YesCommon StockGBUSDJul 1986

Biography

Toll Brothers, Inc., together with its subsidiaries, designs, builds, markets, sells, and arranges finance for detached and attached homes in luxury residential communities in the United States. The company operates in two segments, Traditional Home Building and City Living. It also designs, builds, markets, and sells homes in urban infill markets through Toll Brothers City Living. In addition, the company develops, owns, and operates golf courses and country clubs; develops and sells land; and develops, operates, and rents apartments, as well as provides homeowners with home automation and technology options. Further, it owns and operates architectural, engineering, mortgage, title, landscaping, lumber distribution, house component assembly, and manufacturing operations. The company serves move-up, empty-nester, active-adult, and second-home buyers. Toll Brothers, Inc. was founded in 1967 and is headquartered in Horsham, Pennsylvania. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 00:04
End of Day Share Price2020/02/14 00:00
Earnings2019/10/31
Annual Earnings2019/10/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.