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Lennar is one of the largest public homebuilders in the United States. The company’s homebuilding operations target first-time, move-up, active adult, and luxury homebuyers mainly under the Lennar brand name. Lennar’s financial services segment provides mortgage financing and related services to its homebuyers. Miami-based Lennar is also involved in multifamily and single-family for-rent construction and has invested in numerous housing-related technology startups.

Lennar Corp. based in Miami, is one of the two largest builders of homes based on 80,210 new home deliveries in FY24, up from 73,087 deliveries in FY23. Rival D.R. Horton actually delivered 89,690 in FY24. Lennar's $35.4 billion in revenue ranks close to Horton's $36.7 billion helped by an average sales price of $423,000 that is about $45,000 higher than DHI. Lennar builds homes in approximately 22 states. The company's East region accounts for the most deliveries (27%), but the West counts for 38% of homebuilding revenue because the average closing price is $619,000. Lennar builds step-up (approximately 68% of closings), entry level (28%) and retirement (4%) homes. The company also provides mortgage financing. Lennar's Multifamily business develops and manages apartment complexes through joint ventures. 'Lennar Other, includes the company's Strategic Technology Investments, Multifamily Operations and Single-Family Rentals Homebuilding represented $33.9 billion of the company's $34.4 billion in FY24 revenue. It is also the biggest contributor to pretax earnings. The company's fiscal year ends on November 30.

The major stock indices are all broadly lower at midday on Friday. The major theme remains the serious uncertainty over tariffs and all tariff-related issues. But increasing signs of a possibly slowing economy are also very much in play. Today features worrisome guidance from Lululemon Athletica, which warned about cautious consumers. Meanwhile, PCE, the Fed's preferred inflation gauge, showed that prices in February rose more than expected, and the latest readings of consumer sentiment were at the lowest level since 2022.

Despite bursts of outperformance, small- and mid-cap stocks (SMID) have underperformed large-caps year to date -- as they have over the past five years. But they may be in a better position to generate market-beating returns going forward. For one thing, SMID companies tend to focus on domestic markets, so their businesses could be less disrupted by the trade and tariff debate, or fallout from unrest in the Middle East, the Russian invasion of Ukraine, issues in China, or other geopolitical developments. As well, the prices of SMID stocks generally are lower than the prices of large-caps. Finally, there are long stretches in the record books when SMID stocks have outperformed large-caps. SMID stocks can be risky, but despite those risks, diversified investors look to have exposure to small- and mid-caps based on the long-term performance record. We estimate that 20% of the U.S. stock market's capitalization is comprised of SMID stocks.