Taylor Morrison Home Corp (NASDAQ: TMHC) and LGI Homes (NASDAQ:LGIH) are both small-cap cyclical consumer goods & services companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitabiliy, risk, analyst recommendations, institutional ownership, dividends and earnings.
Institutional and Insider Ownership
86.9% of LGI Homes shares are owned by institutional investors. 13.6% of LGI Homes shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
This is a breakdown of recent ratings and recommmendations for Taylor Morrison Home Corp and LGI Homes, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Taylor Morrison Home Corp||0||9||0||0||2.00|
Taylor Morrison Home Corp presently has a consensus target price of $20.57, indicating a potential downside of 16.27%. LGI Homes has a consensus target price of $34.00, indicating a potential downside of 21.35%. Given Taylor Morrison Home Corp’s higher probable upside, research analysts plainly believe Taylor Morrison Home Corp is more favorable than LGI Homes.
This table compares Taylor Morrison Home Corp and LGI Homes’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Taylor Morrison Home Corp||4.63%||6.12%||3.41%|
Earnings and Valuation
This table compares Taylor Morrison Home Corp and LGI Homes’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Taylor Morrison Home Corp||$3.67 billion||0.35||$337.53 million||N/A||N/A|
|LGI Homes||$838.77 million||1.11||$111.56 million||$3.35||12.90|
Taylor Morrison Home Corp has higher revenue and earnings than LGI Homes.
LGI Homes beats Taylor Morrison Home Corp on 6 of the 10 factors compared between the two stocks.
About Taylor Morrison Home Corp
Taylor Morrison Home Corporation is a homebuilder, which designs, builds and sells single-family detached and attached homes. The Company is also a land developer, with a portfolio of lifestyle and master-planned communities. Its segments include East, which includes Atlanta, Charlotte, North Florida, Raleigh, Southwest Florida and Tampa; Central, which includes Austin, Dallas, and Houston (each of the Dallas and Houston markets include both a Taylor Morrison division and a Darling Homes division); West, which includes Bay Area, Chicago, Denver, Phoenix, Sacramento and Southern California, and Mortgage Operations, which includes Taylor Morrison Home Funding, LLC (TMHF) and Inspired Title Services, LLC (Inspired Title). It operates under the Taylor Morrison and Darling Homes brand names. The Company also provides financial services to customers through its mortgage subsidiary, TMHF, and title insurance and closing settlement services through its title company, Inspired Title.
About LGI Homes
LGI Homes, Inc. is a homebuilder and land developer. The Company is engaged in the design, construction, marketing and sale of new homes in markets in Texas, Arizona, Florida, Georgia, New Mexico, South Carolina, North Carolina, Colorado, Washington and Tennessee. The Company operates through five segments: the Texas division, the Southwest division, the Southeast division, the Florida division and the Northwest division. The Texas division includes homebuilding operations in Houston, Dallas/Fort Worth, San Antonio and Austin locations. The Southwest division includes homebuilding operations in Phoenix, Tucson, Albuquerque, Denver and Colorado Springs locations. The Southeast division includes homebuilding operations in Atlanta, Charlotte and Nashville locations. The Florida division includes homebuilding operations in Tampa, Orlando, Fort Myers and Jacksonville locations. The Northwest division includes homebuilding operations in Seattle location.
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