Lennar (LEN) — Value Breakdown
A scale homebuilder where the true moat is land + entitlements, not lumber and nails.
What They Do
Builds single-family communities at scale, increasingly with build-to-rent pipelines sold to institutional buyers to recycle capital faster.
Key Numbers
- P/E in the low double-digits; modest but steady dividend.
- Strong cash generation; active buybacks reducing share count.
- Large controlled land bank (owned + optioned).
Moat & Disruption Risk
- Moat: Land access, entitlement muscle, vendor scale, bulk exits.
- Disruption: Modular/manufactured entrants + zoning shifts could compress margins.
Management & Capital Allocation
Prioritizes turnover velocity, disciplined land spend, and opportunistic buybacks.
Valuation Snapshot
Priced like a cyclical; earnings power supported by structural housing shortage. Multiple may stay grounded—returns come from execution and capital returns.
Risks That Actually Matter
- Interest rates & credit cycles.
- Land costs and entitlement bottlenecks.
- Quality/litigation spikes.
- Macro housing demand shocks.
ROI (Conservative)
~6–7% / yr
- Assumes steady EPS, ongoing buybacks/dividend.
- Flat multiple valuation.
Not investment advice. Educational use only.
Bottom Line
If performance stays steady, Lennar is a compounding machine—unflashy returns driven by execution and capital recycling.