D.R. Horton’s Dividend Hike Signals Strong Homebuilder Resilience – Time to Buy?

The housing market has been a rollercoaster in recent years, but D.R. Horton (NYSE: DHI) isn’t just surviving—it’s thriving. The nation’s largest homebuilder just announced a $0.40 per share quarterly dividend, marking a 33.3% increase from its previous payout. This isn’t a one-off move. With a track record of 10+ consecutive years of dividend growth, D.R. Horton is proving that even in uncertain times, it knows how to reward shareholders. Let’s break down why this dividend hike could be a buy signal for investors.

The Dividend Details: A Clear Sign of Strength

The dividend, declared on April 17, 2025, will be paid on May 9, 2025, to shareholders of record as of May 2, 2025. The ex-dividend date—when investors must own the stock to qualify—is May 1, 2025. This $0.40 payout isn’t just a raise; it’s part of a $500 million annual dividend commitment for fiscal 2025, up from $480 million in 2024.

The math here is compelling. At a stock price of $167.64 (as of November 1, 2024), the forward dividend yield is 0.95%, which might seem modest. But here’s why it matters: D.R. Horton’s dividend cover ratio of 7.0 means its earnings are seven times higher than the dividend payout, giving it a rock-solid financial cushion. This isn’t a company scraping by—it’s firing on all cylinders.

Why the Housing Market Matters (and D.R. Horton’s Edge)

The housing sector has faced headwinds—from rising mortgage rates to supply-chain disruptions—but D.R. Horton’s strategy has kept it ahead. The company’s focus on affordable, entry-level homes and its geographic diversification (spanning 80 markets) have insulated it from regional downturns.

In the six months ended March 31, 2025, D.R. Horton paid $254 million in dividends, with $125.5 million alone in its second quarter. That’s not pocket change. It shows the company isn’t just talking about shareholder returns—it’s walking the walk.

The Bottom Line: A Dividend Machine with Growth Legs

Let’s be clear: D.R. Horton isn’t just a dividend story. It’s a growth story. With its 17.95% compound annual dividend growth rate over three years, and a history of increasing payouts for over a decade, this is a stock that rewards patience.

The numbers back it up:
- Dividend Yield: 0.95% (forward)
- Dividend Payout Ratio: 11.17% (a conservative 11% of earnings)
- Total 2025 Dividend Guidance: $500 million (up from $480 million in 2024)

Critics might argue that 0.95% isn’t flashy, but in a market where many S&P 500 companies have yields below 2%, D.R. Horton’s stability and growth trajectory make it worth considering. Add in its 7.0 dividend cover ratio—a safety net in case of unexpected headwinds—and this stock starts to look like a defensive gem.

Action Alert: Should You Buy Before the Ex-Dividend Date?

If you’re an income investor or a long-term holder, now is the time to act. To capture the May 9 dividend, you must own DHI shares before the market close on May 1, 2025.

But here’s the kicker: D.R. Horton’s dividend isn’t just about the payout. It’s a barometer of its health. The company’s ability to increase dividends while maintaining disciplined capital allocation (including share repurchases) signals confidence in its future. With the housing market showing signs of stabilization and D.R. Horton’s $0.40 dividend now part of its DNA, this could be a once-in-a-cycle opportunity.

Final Takeaway

D.R. Horton isn’t just a homebuilder—it’s a dividend machine. With a track record of growth, a fortress balance sheet, and a commitment to shareholders that’s unmatched in its sector, this stock is a buy for those who want stability and income. The May 2025 dividend isn’t an end; it’s the next chapter in a story that’s only getting better.

Final Recommendation: Buy DHI before May 1 to lock in the dividend, but don’t stop there. This is a hold-and-grow stock with the potential to outperform in both good and bad markets.

Data as of November 1, 2024. Past performance does not guarantee future results.