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Homebuilder MDC Packaging 1st Annual Profit In Years

By: Investor's Business Daily
Posted: 1/28/2013 6:20:00 PM
Referenced Stocks: DHI;MDC

Thanks to the rebound in the housing market, many homebuilders are now turning quarterly profits. Some are even on track to get back in the black on an annual basis for the first time in years.

Denver-basedMDC Holdings ( MDC ), which builds homes under the Richmond American Homes name, is expected to end five straight years of losses when it reports fourth-quarter and full-year results before the market opens Thursday.

Analysts polled by Thomson Reuters see MDC posting earnings of 40 cents a share in Q4, which would reverse a loss of 40 cents cent a share a year ago.

Sales are expected at $365.8 million, up 48% from a year ago. Top-line growth had accelerated in the latest two quarters.

The company is expected to turn a profit of $1.04 a share for all of 2012. MDC lost $2.12 a share in 2011. For 2013, profit is slated to ramp up to $1.53 a share. The estimate was recently revised higher.

MDC has a Composite Rating of 97 -- one of the highest in the Building-Residential/Commercial industry group. The group was ranked 14 out of the 197 tracked by IBD.

Despite losing money in 2006 through 2011, MDC paid shareholder dividends of $1 a share. Last year, MDC again paid out $1 a share. It also doled out another buck a share in late December, which represented an accelerated payout of dividends for 2013.

At the $1-a-share rate, MDC offers investors an annualized yield of about 2.5%. The stock has the biggest yield among the six dividend-paying companies in its group.D.R. Horton ( DHI ), which reports fiscal Q1 results Tuesday, has a yield of 0.7%, second highest among the homebuilders.

Even though nearly all homebuilders stumbled Monday on news of disappointing December pending-home sales, MDC bucked the trend. It rallied to its best levels since early November.

The stock cleared a 31.60 buy point from a first-stage cup-with-handle base Jan. 17. MDC reset its base count after breaching the low of a prior base in November.

Volume grew only 25% above average on breakout day, which is on the soft side.