DHI vs TOL: How D.R. Horton and Toll Brothers Compare (2026)

Same yardstick, side by side (as of July 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

Reading it: TOL is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. DHI and TOL share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined DHI and TOL exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

D.R. Horton is the largest homebuilder in the United States by volume, building and selling homes across affordable, move-up, luxury, and active-adult segments under brands including D.R. Horton, Express Homes, Emerald Homes, and Freedom Homes. The company operates in dozens of states and hundreds of markets, focusing heavily on entry-level and first-time buyers, where demand has been most durable. D.R. Horton makes money primarily by acquiring and developing land, constructing homes, and selling them to buyers, with additional revenue from its financial-services arm (mortgage origination and title services) and from Forestar, its majority-owned residential lot-development company. A hallmark of its strategy is an asset-light land approach, using options and lot-banking to reduce the capital tied up in raw land. Scale gives D.R. Horton purchasing power with suppliers and subcontractors, helping it compete on price and absorb cyclical swings. It is headquartered in Arlington, Texas, and is a member of the S&P 500.

Full DHI guide

Toll Brothers is a US homebuilder best known for luxury homes, occupying the higher end of the new-construction market. The company designs and builds single-family detached homes, townhomes, and active-adult and master-planned communities, typically targeting move-up and affluent buyers in desirable suburban locations. Toll Brothers makes money by acquiring and developing land, building homes, and selling them at prices well above the industry average, capturing higher margins per home than volume builders focused on entry-level product. It also generates revenue from related operations such as mortgage and title services, apartment and rental ventures, and land development. Because its buyers tend to be wealthier and often less reliant on financing, Toll Brothers has historically been somewhat more insulated from interest-rate swings than entry-level builders, though it remains a cyclical housing business. Headquartered in Fort Washington, Pennsylvania, Toll Brothers operates communities across many US states and is a component of major housing-related indices.

Full TOL guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• DHI drivers: Structural housing shortage; Entry-level focus and scale.
• TOL drivers: Luxury positioning and affluent buyers; Structural US housing undersupply.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Homebuilding is highly cyclical and sensitive to mortgage rates and the broader economy. For TOL, homebuilding is highly cyclical and sensitive to interest rates: when mortgage rates rise, affordability worsens and demand and order volumes can fall, even at the luxury end.

Growth-minded investors who believe the theme has years to run tend to accept the richer multiple for more upside; value-minded investors lean toward the cheaper forward earnings and steadier profile. Pick DHI if you believe its drivers more; TOL if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the DHI and TOL guides.

DHI. D.R. Horton typically trades at a below-market earnings multiple, reflecting the cyclical, rate-sensitive nature of homebuilding. The market discounts builder earnings near cycle peaks and re-rates them through downturns. The financial profile is strong: high returns on capital, a low-leverage balance sheet, a growing dividend, and aggressive buybacks fund capital returns through the cycle.

TOL. Toll Brothers trades at a low earnings multiple typical of cyclical homebuilders, reflecting market caution about where housing sits in the cycle. The qualitative profile is a luxury builder with above-average margins, a strong brand, and improving capital discipline. The low multiple and cyclical nature mean the stock tends to swing with interest-rate expectations and housing data.

Headline figures (approximate, early 2026): DHI shows revenue (ttm) ~$35 billion, homes closed (annual) ~90,000, operating margin ~14-16%, cyclical, net income (ttm) ~$4-5 billion; TOL shows revenue (ttm) ~$10 to 11 billion, average selling price well above the industry average (luxury positioning), gross margin ~25 to 28%, above many volume builders, return on equity strong, in the high teens to low twenties percent.

DHI and TOL are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined DHI and TOL exposure against your real portfolio. It is not an investment adviser.