MDC Holdings is unique among homebuilders: Most analysts recommend buying the stock.
The builder is the top-rated stock in the industry, not for the double ovens it puts in its gourmet kitchens or the Spanish tile roofs, but for the $1.4 billion in cash and investments it holds.
Six of eight analysts advise buying MDC, giving it a 75 percent positive rating. Toll Brothers ranks second with a 44 percent favorable outlook.
“It’s one of the few homebuilding companies that I think really has been on top of things,” said Mark Levine, director of the Burns School of Real Estate and Construction Management at the University of Denver.
MDC, the Denver-based builder of Richmond American Homes, avoided loading up on land and taking on too much debt in the housing boom, said Robert Curran, the lead homebuilding analyst for Fitch Ratings in New York. As the median price for a new U.S. home climbed 50 percent to almost $263,000 and sales rose to a record 1.4 million a year, MDC resisted expanding too fast.
Analysts at Credit Suisse, FTN Midwest Securities, JPMorgan Chase, Goldman Sachs, JMP Securities and Citigroup Global Markets have positive ratings on MDC. Wachovia Securities rates it “market perform,” and Matrix/Lighthouse has a “strong sell” rating on the shares.
