Hovnanian Enterprises (NYSE:HOV – Get Free Report) and Garmin (NYSE:GRMN – Get Free Report) are both consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitability, analyst recommendations, risk, valuation and dividends.
Risk and Volatility
Hovnanian Enterprises has a beta of 1.82, indicating that its stock price is 82% more volatile than the S&P 500. Comparatively, Garmin has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500.
Profitability
This table compares Hovnanian Enterprises and Garmin’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Hovnanian Enterprises | 0.64% | 8.64% | 2.17% |
| Garmin | 24.47% | 20.95% | 17.06% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Hovnanian Enterprises | 2 | 2 | 0 | 0 | 1.50 |
| Garmin | 0 | 4 | 2 | 2 | 2.75 |
Hovnanian Enterprises currently has a consensus target price of $74.00, indicating a potential downside of 35.31%. Garmin has a consensus target price of $310.17, indicating a potential upside of 10.99%. Given Garmin’s stronger consensus rating and higher possible upside, analysts clearly believe Garmin is more favorable than Hovnanian Enterprises.
Earnings & Valuation
This table compares Hovnanian Enterprises and Garmin”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Hovnanian Enterprises | $2.82 billion | 0.24 | $63.87 million | $0.95 | 120.41 |
| Garmin | $7.25 billion | 7.44 | $1.66 billion | $9.70 | 28.81 |
Garmin has higher revenue and earnings than Hovnanian Enterprises. Garmin is trading at a lower price-to-earnings ratio than Hovnanian Enterprises, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
65.4% of Hovnanian Enterprises shares are owned by institutional investors. Comparatively, 81.6% of Garmin shares are owned by institutional investors. 22.7% of Hovnanian Enterprises shares are owned by company insiders. Comparatively, 14.8% of Garmin shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Summary
Garmin beats Hovnanian Enterprises on 12 of the 15 factors compared between the two stocks.
About Hovnanian Enterprises
Hovnanian Enterprises, Inc., through its subsidiaries, designs, constructs, markets, and sells residential homes in the United States. It offers single-family detached homes, attached townhomes and condominiums, urban infill, and active lifestyle homes with amenities, such as clubhouses, swimming pools, tennis courts, tot lots, and open areas. The company markets and builds homes for first-time buyers, first-time and second-time move-up buyers, luxury buyers, active lifestyle buyers, and empty nesters. It also provides mortgage loans, title insurance, and homeowner’s insurance services. The company was founded in 1959 and is headquartered in Matawan, New Jersey.
About Garmin
Garmin Ltd. designs, develops, manufactures, markets, and distributes a range of wireless devices worldwide. Its Fitness segment offers running and multi-sport watches; cycling products; smartwatch devices; scales and monitors; and fitness accessories. This segment also provides Garmin Connect and Garmin Connect Mobile, which are web and mobile platforms where users can track and analyze their fitness, activities and workouts, and wellness data; and Connect IQ, an application development platform. The company's Outdoor segment offers adventure watches, outdoor handhelds and satellite communicators, golf devices, consumer automotive devices, and dog devices, as well as InReach and Gramin response communication device. Its Aviation segment designs, manufactures, and markets various aircraft avionics solutions, including integrated flight decks, electronic flight displays and instrumentation, navigation and communication products, automatic flight control systems and safety-enhancing technologies, audio control systems, engine indication systems, traffic awareness and avoidance solutions, ADS-B and transponders, weather information and avoidance solutions, datalink and connectivity solutions, and various services. The company's Marine segment provides chartplotters and multi-function displays, cartography products, fishfinders, sonar products, autopilot systems, radars, compliant instrument displays and sensors, VHF communication radios, handhelds and wearable devices, sailing products, audio products and accessories, digital switching products, and trolling motors. Its Auto segment offers embedded domain controllers and infotainment units; and software, map database, cameras, wearables, and automotive solutions. The company sells its products through independent retailers, dealers, distributors, installation and repair shops, and original equipment manufacturers, as well as online webshop. Garmin Ltd. was founded in 1989 and is based in Schaffhausen, Switzerland.
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