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What Recession—This Luxury Homemaker (TOL) Just Raised Its Dividend By 9%

Eric McConnell

Thu, Apr 3, 2025, 7:00 AM 4 min read

Although many experts fret that high interest rates and low availability have crippled the real estate sector, that's not entirely the case. The luxury real estate sector is still in high demand and offers some solid opportunities for passive income investors. Luxury home builder Toll Brothers (NYSE: TOL) is performing so well that it raised its dividend by 9%. Keep reading to find out if this stock would work in your portfolio.

Toll Brothers doesn't just build homes; they build dream homes. This Fort Washington, Pennsylvania-based company advertises itself as "America's Luxury Home Builder." According to the company bio, Toll Brothers began in 1967 when founders Robert and Bruce Toll renovated an ordinary house and turned it into a luxury home. By the time they were done, it was the kind of property people who are living the American dream line up to buy.

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The brothers' interest in real estate was inspired by their father, who was also a developer. After success with their first luxury property, the brothers decided to make their mark by developing luxury real estate in the Philadelphia area. The Tolls were so successful in this endeavor that they took their company public in 1986, when their stock opened at $12.50 per share.

By 1993, the company had built and sold its 10,000th home and was operating in a diverse group of real estate markets that included North Carolina, California, Texas, New York, and Florida. Although New York and California already had strong real estate markets, the Toll Brothers' expansion into emerging sunbelt markets like North Carolina, Florida, and Texas proved incredibly astute.

Toll Brothers entered the luxury condominium sector in 2006 with the establishment of Toll Brothers City Living. Their first development, One Ten Third in Manhattan, was a 21-story tower with 77 luxurious residences. Since then, Toll Brothers City Living's portfolio has expanded to include luxury developments in the New York Metro Area, Philadelphia, and Washington, D.C.

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