NOTE: See our roundup of the seven construction/engineering firms that made the Fortune 500 list here.
The annual Fortune 500 list released earlier this week kept the homebuilding industry's strong momentum rolling, as all four featured builders rose in the rankings. NVR had fallen off the list after the recession, but finally found its way back this year, claiming the 498th spot. The Fortune 500 ranks U.S. companies with publicly available earnings information based on their gross revenue after adjustments.
Residential construction has been picking up steam recently, as builders are seeing heightened demand for properties. April marked an unexpectedly strong month for housing, coinciding with economist predictions that 2016 will be housing's "best year in a decade." Housing starts last month rose 6.6% to a 1.172 million annualized rate, existing home sales inched up 1.7%, new home sales soared 16.6% to an eight-year high, and pending home sales surged 5.1%.
The rising revenue for all four homebuilders on the Fortune 500 list reinforces that positive direction for the housing market, with all signs pointing to a continued upward trajectory. We take an in-depth look at each homebuilder that made the list.
D.R. Horton: #260
- Revenue: $10.824 billion (up 34.9%)
- Profits: $751 million (up 40.7%)
- Number of employees: 6,230
- Rank last year: #354 (up 94 spots)
- Years on Fortune 500 list: 14
D.R. Horton, based in Fort Worth, TX, is the nation's largest homebuilder and operates in 27 states. The company once again topped Builder Magazine's Builder 100 list, which was released last month. At the end of 2015, D.R. Horton reported a 23% year-over-year gain in delivered homes for its fourth quarter despite the industrywide challenges of labor shortages and the resulting rise in labor costs. Builder Magazine added, however, that the homebuilding company's supply of controlled lots dwindled last year — echoing an industrywide concern of a lack of available lots.
- Revenue: $9.474 billion (up 21.8%)
- Profits: $803 million (up 25.7%)
- Number of employees: 7,749
- Rank last year: #364 (up 63 spots)
- Years on Fortune 500 list: 12
Lennar, based in Miami, FL, operates in 17 states and ranked second on the Builder 100 list this year. Lennar has said it is optimistic about its rental business, as the company ramped up its multifamily efforts and established a $1.1 billion fund last year to construct apartments in approximately 25 of the country's largest housing markets.
- Revenue: $5.982 billion (up 2.7%)
- Profits: $494 million (up 4.2%)
- Number of employees: 4,542
- Rank last year: #453 (up 20 spots)
- Years on Fortune 500 list: 14
Altanta-based PulteGroup operates in 26 states. The company, which also claimed the third spot on the Builder 100, was the nation's largest homebuilder before the housing crash. However, last year's bump in revenue signals that the company is experiencing a steady climb after years of disappointing results. PulteGroup's corporate leadership was hurled into the spotlight earlier this year, when the company's founder and largest stockholder William J. Pulte demanded the firm's chairman and CEO Richard Dugas either step down or be removed. Pulte called his decision to install Dugas as head of the homebuilding giant "perhaps the biggest mistake of my career" in a letter to board members. Pulte said the company would be better served by a CEO with homebuilding experience.
- Revenue: $5.170 billion (up 16.1%)
- Profits: $383 million (up 36.0%)
- Number of employees: 4,300
- Rank last year: 577 (up 79 spots)
- Years on Fortune 500 list: 7
Reston, VA,-based NVR fell off the Fortune 500 after the housing crash, but it regained its footing last year to climb back onto the list. The builder operates in 15 states and also ranked fourth in the Builder 100. NVR had a strong showing in shareholder returns last year, but its unit backlog and community count results disappointed last year, according to Builder Magazine.