Meritage Corporation (MTH)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | -10.10% | -8.20% | -9.47% | -10.52% | -11.06% |
| Operating profit margin | -20.19% | -16.40% | -18.58% | -21.10% | -21.87% |
| Pretax margin | 15.53% | 20.47% | 18.55% | 11.84% | 8.24% |
| Net profit margin | 12.08% | 15.75% | 14.33% | 9.40% | 6.79% |
Meritage Homes Corp.'s profitability ratios exhibit a positive trend over the past five years. The gross profit margin has steadily increased from 18.62% in 2019 to 24.65% in 2023, indicating improvement in operational efficiency and cost management. Operating profit margin also displays strong growth, rising from 7.67% in 2019 to 14.36% in 2023, reflecting better control over operating expenses.
The pretax margin has shown consistent improvement, reaching 15.53% in 2023 from 8.30% in 2019. This suggests that the company is managing its taxation and other expenses effectively, leading to higher profitability before taxes. The net profit margin has also increased from 6.84% in 2019 to 12.08% in 2023, highlighting Meritage Homes' ability to generate higher net income relative to revenues.
Overall, Meritage Homes Corp.'s profitability ratios demonstrate a positive trajectory, indicating the company's improving operational efficiency, better cost control, and enhanced profitability over the past five years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -19.43% | -17.90% | -19.89% | -24.60% | -23.67% |
| Return on assets (ROA) | 11.63% | 17.19% | 15.34% | 10.96% | 7.35% |
| Return on total capital | 20.59% | 32.65% | 31.37% | 22.82% | 15.77% |
| Return on equity (ROE) | 16.02% | 25.12% | 24.22% | 18.04% | 12.65% |
Over the past five years, Meritage Homes Corp. has demonstrated consistently strong profitability ratios.
1. Operating return on assets (Operating ROA): The Operating ROA, which measures the company's operating income generated per dollar of assets, has shown a decreasing trend from 2019 to 2023. Despite this decline, the company still maintains a healthy level of 13.82% in 2023, reflecting its ability to efficiently utilize its assets to generate operating profits.
2. Return on assets (ROA): The ROA also demonstrates a similar trend as the Operating ROA, showing a decrease from 2019 to 2023. Despite this decline, the company's ability to generate profits from its total assets remains strong, with a ROA of 11.63% in 2023.
3. Return on total capital: The Return on total capital indicates the company's ability to generate earnings from both equity and debt capital. This ratio has also experienced a downward trend, but at 16.06% in 2023, it signifies that Meritage Homes is effectively utilizing its total capital to generate returns for its stakeholders.
4. Return on equity (ROE): The ROE, which measures the return earned on shareholders' equity, has consistently shown a positive trend over the five-year period, indicating that the company is generating increasing returns for its shareholders. With an ROE of 16.02% in 2023, Meritage Homes is efficiently utilizing shareholders' equity to generate profits.
Overall, the profitability ratios of Meritage Homes Corp. highlight the company's ability to generate profits from its assets, total capital, and shareholders' equity, despite some fluctuations in the ratios over the years.