← All companies ← TOI Manual TOP → ← TMHC Homebuilders

TOL, Toll Brothers Inc.

Homebuilders capital-intensive

We design, build, market, sell, and arrange financing for an array of luxury residential single-family detached home, attached home, master-planned, and urban low-, mid-, and high-rise communities.

In recent years, we have pursued a strategy of broadening our product lines, price points and geographic footprint, as well as increasing the number of quick move-in (or "spec") homes that we sell relative to our traditional build-to-order homes.

We operate our own architectural, engineering, mortgage, title, land development, insurance, smart home technology and landscaping subsidiaries.

Latest annual: FY2025 10-K

TOL · Toll Brothers Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$11.0B

+1.1% YoY · 9% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $11.0B 5-yr avg $10.2B

Gross margin 24% 5-yr avg 25%

Operating margin 14.6% 5-yr avg 15.6%

ROIC 13% 5-yr avg 16%

Owner-earnings margin 11% 5-yr avg 11%

Free cash flow margin 11% 5-yr avg 11%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What moves the needle: Gross margin has run about 22% and operating margin about 12% through the cycle, a thin spread that turns the result on volume and the cost of what it sells far more than on the price it sets. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has sat near the cost of capital (median 13%). By owner earnings: roughly 9% of revenue reaches owners as cash, consistently. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2017–2025

realized figures from each filing · older years to the left

2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMApr 2026
										Income statement
$5.8B	$7.1B	$7.2B	$7.1B	$8.8B	$10.3B	$10.0B	$10.8B	$11.0B	$11.0B	RevenueRevenue
22%	22%	22%	20%	22%	24%	26%	28%	25%	24%	Gross marginGross mgn
10%	11%	12%	12%	10%	10%	9%	9%	9%	10%	SG&A / revenueSG&A/rev
$647M	$786M	$681M	$550M	$1.0B	$1.5B	$1.7B	$2.0B	$1.7B	$1.6B	Operating incomeOp. inc.
11.1%	11.0%	9.4%	7.8%	11.6%	14.7%	17.3%	18.8%	15.7%	14.6%	Operating marginOp. mgn
$535M	$748M	$590M	$447M	$834M	$1.3B	$1.4B	$1.6B	$1.3B	$1.3B	Net incomeNet inc.
34%	20%	25%	24%	24%	24%	26%	25%	25%	25%	Effective tax rateTax rate
										Cash flow & returns
$862M	$588M	$438M	$1.0B	$1.3B	$987M	$1.3B	$1.0B	$1.1B	$1.3B	Operating cash flowOp. cash
$25M	$25M	$72M	$69M	$76M	$77M	$76M	$81M	$82M	$78M	DepreciationDeprec.
$272M	($214M)	($251M)	$468M	$370M	($398M)	($207M)	($672M)	($347M)	($85M)	Working capital & otherWC & other
$29M	$28M	$87M	$110M	$67M	$72M	$73M	$74M	$86M	$97M	CapexCapex
0.5%	0.4%	1.2%	1.5%	0.8%	0.7%	0.7%	0.7%	0.8%	0.9%	Capex / revenueCapex/rev
$833M	$560M	$351M	$939M	$1.2B	$915M	$1.2B	$937M	$1.0B	$1.2B	Owner earningsOwner earn.
14.3%	7.8%	4.9%	13.3%	14.1%	8.9%	11.9%	8.6%	9.4%	11.0%	Owner earnings marginOE mgn
$833M	$560M	$351M	$899M	$1.2B	$915M	$1.2B	$937M	$1.0B	$1.2B	Free cash flowFCF
14.3%	7.8%	4.9%	12.7%	14.1%	8.9%	11.9%	8.6%	9.4%	11.0%	Free cash flow marginFCF mgn
$83M	$0	$162M	$60M	$0	$0	—	—	—	$0	AcquisitionsAcquis.
$39M	$62M	$64M	$57M	$77M	$89M	$91M	$93M	$97M	$97M	Dividends paidDiv. paid
$291M	$503M	$234M	$634M	$378M	$543M	$562M	$627M	$651M	—	BuybacksBuybacks
7%	10%	8%	7%	13%	17%	18%	19%	15%	13%	ROICROIC
12%	16%	12%	9%	16%	21%	20%	20%	16%	15%	Return on equityROE
11%	14%	10%	8%	14%	20%	19%	19%	15%	14%	Retained to equityRetained/eq
										Balance sheet
$713M	$1.2B	$1.3B	$1.4B	$1.6B	$1.3B	$1.3B	$1.3B	$1.3B	$1.1B	Cash & investmentsCash+inv
$9.4B	$10.2B	$10.8B	$11.1B	$11.5B	$12.3B	$12.5B	$13.4B	$14.5B	$14.5B	Total assetsAssets
$2.5B	$2.9B	$2.7B	$2.7B	$2.4B	$2.0B	$1.6B	$1.6B	$1.7B	$1.7B	Total debtDebt
$1.7B	$1.7B	$1.4B	$1.3B	$765M	$649M	$296M	$294M	$483M	$637M	Net debt / (cash)Net debt
$4.5B	$4.8B	$5.1B	$4.9B	$5.3B	$6.0B	$6.8B	$7.7B	$8.3B	$8.5B	Shareholders’ equityEquity
0.5%	0.4%	0.4%	0.3%	0.3%	0.2%	0.2%	0.3%	0.3%	0.3%	Stock comp / revenueSBC/rev
										Per share
169M	154M	147M	131M	126M	118M	111M	105M	99.8M	96.1M	Shares out (diluted)Shares
$34.31	$46.32	$49.31	$53.93	$69.87	$87.10	$90.04	$103.61	$109.91	$114.90	Revenue / shareRev/sh
$3.16	$4.85	$4.03	$3.40	$6.63	$10.90	$12.36	$15.01	$13.49	$13.40	EPS (diluted)EPS
$4.91	$3.63	$2.39	$7.16	$9.83	$7.76	$10.75	$8.95	$10.28	$12.64	Owner earnings / shareOE/sh
$4.91	$3.63	$2.39	$6.85	$9.83	$7.76	$10.75	$8.95	$10.28	$12.64	Free cash flow / shareFCF/sh
$0.23	$0.40	$0.43	$0.43	$0.61	$0.75	$0.82	$0.89	$0.97	$1.01	Dividends / shareDiv/sh
$0.17	$0.18	$0.59	$0.83	$0.53	$0.61	$0.66	$0.70	$0.86	$1.00	Cap. spending / shareCapex/sh
$26.73	$30.87	$34.62	$37.15	$42.09	$50.91	$61.23	$73.27	$82.89	$88.16	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	8-yr	5-yr
Revenue / share	+15.7%/yr	+15.3%/yr
Owner earnings / share	+9.7%/yr	+7.5%/yr
EPS	+19.9%/yr	+31.7%/yr
Dividends / share	+19.9%/yr	+17.7%/yr
Capital spending / share	+22.5%/yr	+0.7%/yr
Book value / share	+15.2%/yr	+17.4%/yr

The record, charted

FY2017–2025

Each measure over its full record; the current point and the worst year marked.

Share count

100Mpeak FY2017

ROIC

15%low FY2017

Gross margin

25%low FY2020

Net debt ÷ owner earnings

0.5×peak FY2019

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$1.0Bowner earningsvs.$1.3Bnet incomelow FY2019

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2017FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $1.3B of profit but $1.0B of owner earnings: $320M less than the profit line, taken out by capital spending and the timing of cash.

Reported net income$1.3B

Owner earnings$1.0B · 9% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$1.3B	$1.6B	$1.4B	$1.3B	$834M
Depreciation & amortizationnon-cash charge added back	+$82M	+$81M	+$76M	+$77M	+$76M
Stock-based compensationreal costnon-cash, but a real cost	+$31M	+$30M	+$25M	+$21M	+$23M
Working capital & othertiming of cash in and out, other non-cash items	−$347M	−$672M	−$207M	−$398M	+$370M
Cash from operations	$1.1B	$1.0B	$1.3B	$987M	$1.3B
Capital expenditurecash put back in to keep running and to grow	−$86M	−$74M	−$73M	−$72M	−$67M
Owner earnings	$1.0B	$937M	$1.2B	$915M	$1.2B
Owner-earnings marginowner earnings ÷ revenue	9%	9%	12%	9%	14%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position . The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $31M), owner earnings is nearer $995M.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? —

No meaningful interest burden

Little or no interest expense reported

What this means
Little or no interest expense reported, the business isn't leaning on lenders to operate.
How heavy is the debt, net of cash? $483M · 0.3× operating profit

Modest net debt

Cash $1.3B − debt $1.7B

What this means
Netting $1.3B of cash and short-term investments against $1.7B of debt leaves $483M owed, about 0.3× a year's operating profit (1.0× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital 13%

Solid through the cycle

9-yr median, range 7%–19%; 15% latest = NOPAT $1.3B ÷ invested capital $8.8B

Industry peers: median 19%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 9 years (it ran 15% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 9%

Solid through the cycle

9-yr median margin, range 5%–14%; latest $1.0B = operating cash $1.1B − maintenance capex $86M

Industry peers: median 5%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 9% of revenue this year, a 9% median across 9 years. Treating stock comp as the real expense it is (less $31M of SBC) leaves $995M.
Are earnings backed by cash? 0.83×

Mostly cash-backed

Cash from ops $1.1B ÷ net income $1.3B

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 73%

Returns about half

Dividends + buybacks $748M ÷ Owner Earnings $1.0B

What this means
Of $1.0B Owner Earnings, $748M (73%) went back to shareholders, $97M dividends, $651M buybacks. Net of $31M stock comp, the real buyback was about $620M. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 1.05×

Maintaining

Capex $86M ÷ depreciation $82M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 4 of 4 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Pass

Revenue ≥ $2B · $11.0B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity —

Current ratio ≥ 2× · —

What this means
Current assets / liabilities not in the data yet.
Earnings stability Pass

A profit every year (9-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (9)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +129%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $15.30/share (latest year $14.41), the averaged base the calculator's gate runs on, and book value is $88.48/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2017–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 9 of 9

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 3 of 9 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 11% → 17% (3-yr avg ends)

What this means
Through the cycle the operating margin widened — about 11% early to 17% lately, median 12% — pricing power intact or improving.
Reinvestment, incremental ROIC returns capital

What this means
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
Owner earnings growth +4%/yr

What this means
Owner earnings grew about 4% a year over the record.
Worst year 2020 · 7.8% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −6.4%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

How the cash was used, 2017–2025

Over the record, the business generated $8.6B of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$625M · 7%
Dividends$668M · 8%
Buybacks$4.4B · 52%
Retained (debt / cash)$2.9B · 33%

Returned to owners$5.1B
64% of the owner earnings the business produced over the span, $668M as dividends and $4.4B as buybacks.
Average price paid for buybacks$55.99
Across the years where the filing reports a share count, 79M shares were bought for $4.4B, about $55.99 each. Year to year the price paid ranged from $35.28 (2019) to $127.61 (2024); its heaviest year, 2025, paid $120.34 ($651M).
Net change in share count−43.3%
The diluted count fell from 169M to 96M, so the buybacks outran the stock issued to staff.
Dividend record$0.97/sh
Paid in 9 of the years on record, the per-share dividend growing about 20% a year. It was never cut over the span.
Return on what it retained13%
Of the earnings it kept rather than paid out ($3.6B over the span), annual owner earnings (first three years vs last three) grew $471M, so each retained $1 added about 0.13 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Mr. Yearley	$12.2M	$18.8M	$1.2B
2022	Mr. Yearley	$11.2M	$7.1M	$915M
2023	Mr. Yearley	$15.2M	$28.8M	$1.2B
2024	Mr. Yearley	$16.5M	$40.9M	$937M
2025	Mr. Yearley	$15.3M	$17.8M	$1.0B

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership1.4%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$31M
The slice of the business handed to employees in shares this year, 0% of revenue, equal to 2% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Toll Brothers Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2017–2025.

1 of the 5 tests turned up something to look into; the other 4 came back clean.

Look hereAre "one-time" charges a yearly habit?5 of 9 years
Management took an impairment or write-down in 5 of the last 9 years, $308M in all. Taken across the majority of the record, the "one-time" label is wearing thin — ask whether these are past deals coming due rather than genuinely isolated events. Read it beside the goodwill the company still carries.

And these came back clean

Is it less profitable than it was?
Did the share count rise anyway?
Did debt outgrow the business?
Did reported profit become cash?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, Homebuilders

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
PHMPulteGroup Inc.	$17.3B	—	16.3%	19%	9%
TOLToll Brothers Inc.	$11.0B	22%	11.6%	13%	9%
NVRNVR Inc.	$10.3B	—	16.0%	76%	12%
TMHCTaylor Morrison Home Corporation	$8.1B	20%	9.1%	8%	10%
KBHKB Home	$6.2B	—	8.8%	15%	5%
MHOM/I Homes Inc.	$4.4B	23%	11.0%	20%	3%
DFHDream Finders Homes Inc.	$4.3B	16%	7.8%	41%	3%
CCSCentury Communities Inc.	$4.1B	—	7.9%	6%	-1%
Group median	—	21%	10.0%	17%	7%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Toll Brothers Inc. has delivered.

Today’s price $

Through the cycle, Toll Brothers Inc. earns about $1.0B on its 9.4% median owner-earnings margin. This year’s 9.4% margin runs in line with that. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($1.0B) Net of stock comp (−$31M) Steady-state · maintenance capex ($1.2B)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25−2%/yr

Owner-earnings growth · ’17→’25+4%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $1.2B on 93M shares outstanding, per the 10-Q cover, as of 2026-05-27; net debt $637M. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($97M) runs well above depreciation ($78M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $1.2B, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh TOL against another business →

The owners of TOL: the meeting and the votes →

Cite: Owner Scorecard, "Toll Brothers Inc. (TOL), the owner's record," https://ownerscorecard.com/c/TOL, data as of 2026-07-09.

Manual order: ← TOI its page in the Manual TOP →

Industry order: ← TMHC the Homebuilders chapter