April 21, 2018

IPOs Helping Builders in 'Biggest' Rankings

-A A +A

IPOs Helping Builders in 'Biggest' Rankings

Since January, five home builders have debuted on the stock market, raising nearly $1.46 billion cumulatively on IPOs, The Wall Street Journal reports. That increased presence on the stock market has the potential to reorder the rankings on who’s the “biggest”—changing up the bragging rights among builders, according to analysts. 

Taylor Morrison Home Corp., a builder in western and southern states, has gotten a big boost in the rankings since it’s gone public. In the last year, the builder has gone from 14th largest company—based on enterprise value—to 11th. “Enterprise value takes into account equity, debt, preferred shares, minority interests, and cash on hand,” The Wall Street Journal explains. 

Public builders tout their size because they believe it helps with getting financing for their projects. With more builders being publicly traded, analysts say that likely will lead to more “money chasing deals.” 

“The potential impact would be a more competitive land [acquisition] environment,” says Adam Rudiger, an analyst with Wells Fargo Securities who tracks homebuilder stocks. “The more people that have money, the more dollars there are chasing land.”

The top five builders ranks based on their enterprise value are: 

  • Lennar: $11.1 billion 
  • D.R. Horton: $9 billion 
  • PulteGroup Inc: $7.5 billion 
  • Toll Brothers: $7.1 billion  
  • NVR Inc.: Nearly $3.9 billion

Source: “After IPO, Builder Joins ‘Biggest’ Rankings,” The Wall Street Journal (Aug. 2, 2013)

Read more

Another Homebuilder Files IPO
Home Builder Doubles IPO Size