Does Meritage Homes’ (MTH) Steady Dividend Amid Softer Earnings Reveal a Shifting Growth Strategy?

• Meritage Homes recently announced a quarterly dividend of US$0.43 per share, payable on December 31, 2025, matching previous dividends, with an ex-date and record date of December 17, 2025.
• Despite missing analysts' expectations on both earnings per share and revenue, the company projected Q4 2025 home closing revenue supported by an increased community count, signaling a continued focus on growth in homebuilding activity.
• We'll explore how maintaining the dividend amid softer earnings and increased community count could impact Meritage Homes' broader investment outlook.

Find companies with promising cash flow potential yet trading below their fair value.

Meritage Homes Investment Narrative Recap

To be a shareholder in Meritage Homes, one would need to believe in the company's capacity to capture new-home demand through its expanding community count, despite ongoing margin and earnings pressures tied to housing affordability. The consistent dividend announcement does not materially change the most important short-term catalyst, community count growth, or the biggest risk, which is persistent margin compression from affordability challenges and competitive pressures.

Among recent company actions, the maintained quarterly dividend of US$0.43 per share stands out. This persistence, even with softer earnings, highlights management's approach to financial stability while the company seeks to unlock value from its ongoing build-out of new communities, which remains central to driving future revenue opportunities.

Yet, in contrast, investors should be aware of ongoing margin risk if affordability headwinds and buyer hesitation continue to persist as...

Read the full narrative on Meritage Homes (it's free!)

Meritage Homes' outlook projects $7.1 billion in revenue and $549.0 million in earnings by 2028. This requires 4.8% annual revenue growth but a decrease in earnings of $89.3 million from the current $638.3 million.

Uncover how Meritage Homes' forecasts yield a $82.62 fair value, a 13% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community has published four fair value estimates for Meritage Homes, ranging from US$60 to US$324.98 per share. While many see opportunity in the company's growing footprint, some remain focused on the challenge of protecting margins as affordability pressures linger, inviting you to compare these varied viewpoints for yourself.

Explore 4 other fair value estimates on Meritage Homes - why the stock might be worth over 4x more than the current price!

Build Your Own Meritage Homes Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Meritage Homes research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Meritage Homes research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Meritage Homes' overall financial health at a glance.

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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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