Head to Head Review: Smith Douglas Homes (NYSE:SDHC) versus Dream Finders Homes (NASDAQ:DFH)

Dream Finders Homes (NASDAQ:DFH) and Smith Douglas Homes (NYSE:SDHC) are both construction companies, but which is the superior business? We will compare the two companies based on the strength of their risk, analyst recommendations, valuation, profitability, dividends, earnings and institutional ownership.

Analyst Ratings

This is a summary of recent recommendations and price targets for Dream Finders Homes and Smith Douglas Homes, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dream Finders Homes	0	2	0	0	2.00
Smith Douglas Homes	0	5	1	0	2.17

Dream Finders Homes currently has a consensus target price of $32.00, suggesting a potential downside of 7.94%. Smith Douglas Homes has a consensus target price of $27.70, suggesting a potential upside of 3.71%. Given Smith Douglas Homes’ stronger consensus rating and higher probable upside, analysts plainly believe Smith Douglas Homes is more favorable than Dream Finders Homes.

Profitability

This table compares Dream Finders Homes and Smith Douglas Homes’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dream Finders Homes	7.89%	36.62%	12.40%
Smith Douglas Homes	N/A	N/A	N/A

Institutional & Insider Ownership

95.6% of Dream Finders Homes shares are held by institutional investors. 74.1% of Dream Finders Homes shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Dream Finders Homes and Smith Douglas Homes’ gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dream Finders Homes	$3.75 billion	0.86	$295.90 million	$2.85	12.20
Smith Douglas Homes	$764.63 million	0.31	$123.18 million	N/A	N/A

Dream Finders Homes has higher revenue and earnings than Smith Douglas Homes.

Summary

Dream Finders Homes beats Smith Douglas Homes on 8 of the 11 factors compared between the two stocks.

About Dream Finders Homes

Dream Finders Homes, Inc. operates as a holding company for Dream Finders Homes LLC that engages in homebuilding business in the United States. The company operates through four segments: Southeast, Mid-Atlantic, Midwest, and Financial Services. It designs, constructs, and sells single-family entry-level, and first-time and second time move-up homes, as well as active adult homes and custom homes in Florida, Texas, Tennessee, North Carolina, South Carolina, Georgia, Colorado, and the Washington, D.C. metropolitan area. The company markets its homes under various brands, including Dream Finders Homes, DF Luxury, Craft Homes, and Coventry Homes. It also provides insurance agency services, including closing, escrow, and title insurance, as well as mortgage banking solutions. The company sells its homes through its sales representatives and independent real estate brokers. The company was founded in 2008 and is headquartered in Jacksonville, Florida.

About Smith Douglas Homes

Smith Douglas Homes Corp., together with its subsidiaries, engages in the design, construction, and sale of single-family homes in the southeastern United States. It also provides closing, escrow, and title insurance services. The company sells its products to entry-level and empty-nest homebuyers. Smith Douglas Homes Corp. was founded in 2008 and is headquartered in Woodstock, Georgia.