Discounted Cash Flow Calculation for DB:CCT using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
Note: Free cash flow to equity valuations ignore the company's cash or debt.
DB:CCT DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Century Communities's earnings available for a low price, and how does
this compare to other companies in the same industry?
Century Communities's earnings are expected to grow significantly at over 20% yearly.
Century Communities's revenue is expected to grow by 7.7% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Century Communities's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
1/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Century Communities's finances.
The net worth of a company is the difference between its assets and liabilities.
Century Communities is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Century Communities's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Century Communities's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is covered by short term assets, assets are 1.9x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Dale Francescon has been Co-Chief Executive Officer of Century Communities, Inc. (the "Company") since August 2002 and has served as the Chairman of its Board since April 2013. Mr. Francescon has successfully managed the Company through successive profitable years, in various economic cycles, from inception in August 2002 to the present. Prior to the formation of the Company, from 1996 to 2000, Mr. Francescon served as Co-Division President for D.R. Horton, the largest homebuilder in the United States. During that time, his division achieved among the highest profitability and return on investment as compared to the other Horton divisions. Prior to his tenure at D.R. Horton, Mr. Francescon owned and operated Trimark Communities from 1993 to 1996 when it was sold to D.R. Horton. Trimark Communities was the largest builder of attached, for sale homes in the state of Colorado. Mr. Francescon is actively involved in various civic and professional organizations. Mr. Francescon is licensed in the state of Colorado as a real estate broker and in the state of California as an Attorney (inactive) and a Certified Public Accountant (inactive). Mr. Francescon received his B.S. in Business Administration from the University of Southern California and a J.D. from Loyola University School of Law.
Dale's compensation has increased by more than 20% in the past year whilst earnings fell less than 20%.
Dale's remuneration is higher than average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Century Communities management team is about average.
Chairman & Co-CEO
CFO & Secretary
Chief Accounting Officer
Senior Vice President
Vice President of Sales
Vice President of Human Resources
Executive Vice President of Wade Jurney Homes
President of Single-Family Division
President of Colorado Division
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Century Communities board of directors is about average.
Board of Directors
Chairman & Co-CEO
Presiding Independent Director
Who owns this company?
Recent Insider Trading
Century Communities individual insiders have only sold shares in the past 3 months.
Was Century Communities Inc's (FRA:CCT) Earnings Growth Better Than The Industry's?
After looking at Century Communities Inc's (DB:CCT) latest earnings update (31 March 2018), I found it helpful to revisit the company's performance in the past couple of years and compare this against the latest numbers. … See our latest analysis for Century Communities How CCT fared against its long-term earnings performance and its industry To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. … This suggests that whatever uplift the industry is deriving benefit from, Century Communities is able to amplify this to its advantage.What does this mean?
Century Communities, Inc. engages in the design, development, construction, marketing, and sale of single-family attached and detached homes. It is also involved in the entitlement and development of the underlying land; and provision of mortgage, title, and insurance services to its home buyers. The company sells homes through its sales representatives, as well as through independent real estate brokers in 17 states in the United States. Century Communities, Inc. was founded in 2000 and is headquartered in Greenwood Village, Colorado.
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