- The Washington Times - Monday, January 17, 2005

A new acquisition by McLean-based NVR Inc. is helping the company continue steady gains in the housing business.

In its latest move, the company acquired Columbia, S.C.-based Rymark Homes this month for an undisclosed amount.

NVR is one of the big names along the East Coast in the home-building and mortgage-banking business whose fortunes have improved with the housing boom in recent years.

Since the company was incorporated in 1980, it has grown to include about 3,850 employees who provide customers with single-family detached houses , town houses and condominium buildings.

Only six months ago, its stock was trading at $476.90 per share. NVR’s stock closed Friday at $797 a share, up 16 points, or 2 percent, from a day earlier on the New York Stock Exchange. The markets were closed yesterday for Martin Luther King Day.

“Given the success and growth of that company and the growth of their sales, I would have to think they’re building a pretty good product,” said Mike Toalson, executive vice president of the Home Builders Association of Virginia. “They seem to be doing well.”

Rymark operates mostly in the Columbia area in a market geared primarily toward first-time home buyers.

“We intend to maintain the Rymark business as a separate brand name and product line,” said Dwight Schar, NVR’s chief executive officer.

Since the Jan. 5 announcement, NVR’s stock value has risen about 77 points, or more than 9 percent.

The Rymark acquisition adds another brand name to NVR’s portfolio, which already includes Ryan Homes, NVHomes and Fox Ridge Homes. The company also provides mortgage services to its house-building customers in 11 states.

Ryan Homes and Fox Ridge Homes are sold primarily to first-time home buyers or initial moving-up buyers. NVHomes are built primarily for upscale buyers in the Washington, Baltimore and Philadelphia areas.

“I don’t think they’re building much of anything now that is under $1 million,” said John Kortecamp, executive vice president of the Home Builders Association of Maryland. “That’s very easy to do in this market.”

However, ValuEngine Inc., a stock market forecasting firm, said the sharp rise in NVR’s stock last year is expected to slow in 2005 as interest rates rise and the housing boom cools.

ValuEngine projects a one-year target price for NVR’s stock of $845.75 per share.

Already, ValuEngine said, NVR’s stock is overvalued by 14.35 percent.

At the same time, ValuEngine continues to rate NVR’s stock as “attractive” for conservative investors. It yielded a 77.7 percent return on investment in the last year. In the coming year, it is expected to yield a 6.12 percent return, ValuEngine said.

Although full-year results for 2004 have not been announced, they are expected to be consistent with third-quarter performance and earnings of recent years.

Net income rose 35 percent to nearly $148 million, or $19.04 per diluted share, in the third quarter of 2004, compared with $109 million, or $12.55 per diluted share a year earlier.

Full-year profits in 2003 reached $419.8 million, up 27 percent from $331.5 million in 2002.

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