DHID.R. Horton, Inc.

D.R. Horton builds and sells homes nationwide, betting on the affordable segment for first-time buyers.

A homebuilder buys land, brings in utilities, builds and sells. The key lever is turnover: the faster a plot becomes a sold house, the higher the return on capital even if the mark-up is modest. The company deliberately owns less land outright, buying options on lots from third-party developers instead.

Demand runs into the mortgage rate. When it is high the builder pays to buy the rate down for the purchaser — in effect handing over part of the margin to keep sales moving. That line explains why volumes hold up while profitability slips. Risks: material prices, labour availability and the stock of unsold finished homes. The company pays a small dividend and buys back stock actively.