Shares of KB Home have increased in value by nearly 50% over the last year. Since May 1 of last year, when the share price closed at $43.39 to when it closed at $64.76 on April 30, the stock has been on a roller coaster of sorts.
After trading in the $40 range for most of last summer and fall, the stock began to rise in November and hit its 52-week closing price high of $70.88 on March 28. But by April 18, the day KB announced a new $1 billion share buyback plan after the market closed, the stock closed at $60.41 and then ended at $61.03 the following day for an increase of just more than 1%.
KB Home Chief Executive Jeffrey Mezger said that the board of director’s actions in authorizing the share repurchases underscores the company’s commitment to long-term value creation.“With a strong balance sheet and confidence in our ability to generate a significant level of operating cash flow as we continue to evolve into a larger and more profitable company, we are committed to our balanced approach of investing in our growth while simultaneously returning a meaningful level of cash to stockholders,” Mezger said in a statement.
The stock price in the company fell by almost 2% from its close of $69.89 on March 20 – the day it released its fiscal first quarter earnings after the market closed– to a close of $68.62 the following day. On March 20, KB reported net income of $139 million (1.76 a share) for the quarter ending Feb. 29, an increase over the net income of $126 million ($1.45) in the same period of the previous year. Revenue increased by 6% from the first quarter of the prior fiscal year to $1.5 billion.
Growing into a large builder
Westwood-based KB Home was founded in 1957 in Detroit by Donald Kaufman and Eli Broad – the K and the B in its name.They grew the company into one of the premier residential home builders in the country. It has been recognized multiple times on the Builder 100 list of top companies in the U.S. and was included on Fortune’s 2023 Change the World list, recognizing the home builder for its sustainability leadership.And the company announced in late March that it had been named to the Newsweek Most Trustworthy Companies list for a third consecutive year which sent the share price up by nearly 2% from a close of $69.56 on March 27 to one of $70.88 on the following day.
“This acknowledgment underscores our long-standing commitment to delivering industry-leading customer satisfaction as well as fostering a culture of trust, integrity, collaboration and excellence,” Mezger said in a statement. “This distinction is also a testament to the relationships we build with our homebuyers and the passion the entire KB Home team has for building our customers’ dreams and putting the great American aspiration of homeownership within reach for thousands of families.”
