Current Report: M.D.C. Holdings

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M.D.C. Holdings Inc, known by the ticker symbol MDC, is a mid-cap residential construction company, operating in the consumer cyclical business sector. This is my first report on M.D.C. Holdings Inc for this Viital portfolio. I previously discussed it for a couple of my six previous dog portfolios.

M.D.C. Holdings Inc is an American holding company that operates home construction, mortgage, insurance, and title companies. The company focuses on single-family and residential communities via its Richmond American Homes brand in Arizona, California, Colorado, Florida, Virginia, Nevada, Utah, and Washington.

MDC Holdings constructs homes for first-time and move-up homebuyers. Its segments include Homebuilding and Financial Services. Its Home construction in Colorado, California, Washington, and Arizona derive most of the company's homebuilding revenue, followed by Utah, and Virginia.

Its financial services operations comprise originating mortgage loans primarily for homebuyers; providing insurance coverage primarily to its homebuilding subsidiaries and subcontractors, and for work performed in completed subdivisions; acting as a re-insurer on the claims; selling third-party personal property and casualty insurance products to homebuyers; and offering title agency services to homebuilding subsidiaries and customers in Colorado, Florida, Maryland, Nevada, and Virginia.

M.D.C. Holdings, Inc. was founded in 1972 and is headquartered in Denver, Colorado.

Three key data points gauge any dividend equity or fund such as M.D.C. Holdings Inc (MDC)

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.

MDC Price

MDC’s price per share was $37.88 as of yesterday's market close. One year ago its price was $62.10. Therefore, MDC’s share price fell $24.22 or about 39% in the past year.

If MDC’s  stock trades in the range of $30.00 to $60.00 this next year, its recent $37.88 share price might rise by $12.12 to reach $50.00 by May 10, 2023. My $50.00 upside estimate is $6.70 less than the median of price upsides gauged by five analysts tracking MDC for  brokerages.

MDC Dividends

M.D.C. Holdings Inc’s most recently declared quarterly dividend of $0.50 is payable May 25th to shareholders on record as of today, May 10th.   

MDC initiated a variable quarterly dividend January 2, 1984. Since 2016 the Q dividend has increased annually. At its recent .0.50 Q rate, MDU’s annual payout of $2.00 is estimated to deliver a 5.28% annual yield per yesterday’s $37.88 share price.

MDC Returns

Adding the $2.00 MDC annual dividend to the estimated one-year price upside of $12.12 shows a $14.12 potential gross gain, per share, to be reduced by any costs to trade MDU shares.

At yesterday's $37.88 closing price per share, a little under $1000 would buy 26 shares.

A $10 broker fee (if charged) would be paid half at purchase and half at sale and might cost us about $0.38 per share.

Subtract that maybe $0.38 brokerage cost from my estimated $14.12 gross gain estimate per share results in a net gain of $13.74 X 26 shares = $357.24 for a 35.7% net gain on a $984.88 investment.

So it is that M.D.C. Holdings Inc (MDC) shows a possible 35.7% net gain including a 5.28% forward looking dividend yield.

Over the next year at this time our $1000 investment in MDC shares could generate $52.80 in cash dividends. Of course a single share of MDC stock bought at yesterday's $37.88 price is over 1.25 times lower than the anticipated dividend income from our $1000.00 invested.

So, by my dogcatcher ideal, this is a good time to pick up MDC’s shares based on their declared dividends for the year 2022. The forthcoming annual dividend from $1K invested is currently 1.39 times more than yesterday's single share price. Consider yourself alerted. It's a sign.

All of the estimates above are speculation based on the past history of M.D.C. Holdings Inc (MDC). Only time and money invested in this stock will determine its market value.

Disclaimer:  This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

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