The Synopsis Dialogue. Floor & Decor and Dream Finders Homes 4Q24, Founders vs Managers, SSS Controversy, Why ROE over ROIC
10 snips
Mar 19, 2025 Explore the trials and triumphs of Dream Finders Homes amid rising interest rates and strategic acquisitions. Discover why return on equity (ROE) is a hot topic compared to return on invested capital (ROIC) in today's market. Delve into the controversy around same-store sales at Floor & Decor, and hear about their innovative shift toward commercial flooring. Learn how tariffs impact supplier dependence while the companies adjust their operations for resilience. Get insights on the balance of aggressive and cautious strategies in a challenging housing environment.
AI Snips
Chapters
Transcript
Episode notes
ROE vs. ROIC for Homebuilders
- Return on Equity (ROE) can be more insightful than Return on Invested Capital (ROIC) for homebuilders.
- Their interest expense, capitalized in cost of goods sold, distorts ROIC.
DFH's National Expansion
- Dream Finders Homes (DFH) started in Jacksonville, but it's no longer their largest market.
- Their national footprint is expanding successfully, with operations across the country.
Floor & Decor Investment Considerations
- Floor & Decor's performance depends on their long-term value proposition and its defensibility.
- Investors should also consider the current price and expected return.