The undisputable leader in efficiency among homebuilders is PulteGroup ( PHM ). It has the highest Gross Margin of 23.6% though its Net Margin of 8.64% less than that of NVR and TOL. The second in the list in terms of the highest FCF-Margin is NVR. Both PHM and NVR have very attractive Free-Cash-Flow yield, 13.1% and 7.37% accordingly.

Toll Brothers ( TOL ) and Lennar ( LEN ) have much weaker Free-Cash-Flow yield but still over my threshold of 5%.

In conclusion, I add to my Watch List fours stocks: PHM, NVR, TOL and LEN