Cyrela: a homebuilder with a 15% ROE at 3.7 times earnings
CYRE3Cyrela
HomebuilderFormula: Warren Buffett · Price R$ 17.09 (Friday close)Cyrela has averaged 15.3 cents of profit a year on every real of shareholder money, and the whole company costs only 3.65 times one year's profit. Among the 13 quality names on Buffett's screen, none was cheaper.
The thesis
A homebuilder that earns 15% a year on its own capital, priced at 3.65 times earnings. That is the whole pitch. Cyrela averaged 15.3% ROE over five years and 18.3% in the last 12 months, the kind of steady return Buffett's test asks for, yet the stock trades at an earnings yield of 27.4% and 0.67× book value. That price says the market expects profits to shrink. The record so far doesn't show it.
What the company does
Cyrela develops and builds residential projects, from high-end towers under its own brand to mid-income lines. It also holds stakes in other listed homebuilders, including about 15% of Cury, which focuses on low-income housing. In December 2025 it paid an extra R$ 2.73 per share in dividends, about R$ 1 billion.
Why the formula picked it
Thirteen companies passed: a five-year ROE of at least 15% with no year under 10% (Cyrela's worst was 11.4%), profit every year, and net debt of about 2.3× a year of profit, under the 3× limit. Among them, Cyrela had the lowest P/E.
Bear case
Homebuilding runs in cycles, and with the Selic at 13.75% mortgages are expensive. Profit grew only about 2.7% a year while revenue grew about 19.8%, a sign of thinner margins. The 18.7% trailing yield is mostly that one-off December payout, approved before Brazil's new tax on dividends started in 2026; the five-year average is 3.1%. And a P/E this low usually means the market expects earnings to fall.
What would break the story
A five-year ROE under 15%, any year under 10%, a loss-making year, or net debt above 3× a year of profit. A P/E that rises sharply while others stay cheaper would also push it off the top.
Since the screen picked it
Start: October 30, 2026 · R$ 17.09
| CYRE3 | Ibovespa | Difference | |
|---|---|---|---|
| So far | First update on the next Saturday | ||
| 3 months | On January 30, 2027 | ||
| 6 months | On April 30, 2027 | ||
| 9 months | On July 30, 2027 | ||
| 12 months | On October 30, 2027 | ||
Price change only: dividends are not included, in the stocks or in the benchmark. The Ibovespa is measured through BOVA11, the ETF that tracks it. Prices: B3 end of day. Updated every Saturday. Past results do not predict future ones.
All the numbers
Also passed: POMO4, DIRR3, PETR4
Sources for the company facts
- Investidor10: Cyrela pays R$ 2.73 per share (Dec 2025)
- BPMoney: Cyrela's stakes in Cury and others (Apr 2026)
- Bora Investir (B3): the rush to approve dividends before the new tax (Dec 2025)
Financial numbers: B3 closing prices (Friday) and CVM filings, computed by our screen.