⚠ Conservatism Costs GrowthLow threat

A permanently under-leveraged balance sheet is a genuine cost, not a free virtue. In the good years, when demand is strong and land bought earlier is selling well, a more aggressive rival that borrows to build and buy more can grow faster and earn a higher return on its equity than Dom, which is leaving leverage — and therefore some growth and some return — on the table by choice. Over a long boom, that gap compounds, and impatient shareholders may ask why the company will not press its advantages harder; the market, for its part, prices the restraint at roughly eleven times earnings¹. The discipline that saves Dom in the downturn is the same discipline that makes it lag the bolder operators in the upturn, and there is no way to have the safety without paying, in forgone upside, for the insurance.