Cash-Rich M.D.C. Holdings Buys Land

M.D.C. Holdings finished the fourth quarter of 2010 with a quarterly earnings performance of $127.2 million, or $2.68 per diluted share. How? The company had all the key metrics moving in the right direction from the same time last year. New orders were up 82%, backlog was up 55%, gross margins grew 590 basis points to 18.2%--even the company's billion-plus cash position grew, thanks to a greater-than-expected $142.6 million tax benefit. About the worst that could be said about the company was that its SG&A, as a percentage of revenues, was high relative to its peers at about 19.7%, although SG&A costs did decrease in dollar value. On an annual basis, the builder reported net income of $24.7 million, or 52 cents per diluted share, for 2009. (In 2008, M.D.C. lost $380.5 million.)

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