Financial Analysis: D.R. Horton (NYSE:DHI) & Taylor Wimpey (OTCMKTS:TWODY)

D.R. Horton (NYSE:DHI) and Taylor Wimpey (OTCMKTS:TWODY) are both construction companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Profitability

This table compares D.R. Horton and Taylor Wimpey’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
D.R. Horton	11.46%	15.74%	11.07%
Taylor Wimpey	N/A	N/A	N/A

Volatility and Risk

D.R. Horton has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500. Comparatively, Taylor Wimpey has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500.

Insider & Institutional Ownership

90.6% of D.R. Horton shares are owned by institutional investors. 0.5% of D.R. Horton shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for D.R. Horton and Taylor Wimpey, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
D.R. Horton	2	8	5	1	2.31
Taylor Wimpey	1	2	0	1	2.25

D.R. Horton presently has a consensus target price of $156.54, suggesting a potential upside of 2.77%. Given D.R. Horton’s stronger consensus rating and higher possible upside, equities research analysts clearly believe D.R. Horton is more favorable than Taylor Wimpey.

Dividends

D.R. Horton pays an annual dividend of $1.60 per share and has a dividend yield of 1.1%. Taylor Wimpey pays an annual dividend of $1.12 per share and has a dividend yield of 8.0%. D.R. Horton pays out 12.8% of its earnings in the form of a dividend. D.R. Horton has increased its dividend for 10 consecutive years.

Valuation and Earnings

This table compares D.R. Horton and Taylor Wimpey”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
D.R. Horton	$36.80 billion	1.23	$4.76 billion	$12.47	12.22
Taylor Wimpey	$4.37 billion	1.13	$433.99 million	N/A	N/A

D.R. Horton has higher revenue and earnings than Taylor Wimpey.

Summary

D.R. Horton beats Taylor Wimpey on 12 of the 15 factors compared between the two stocks.

About D.R. Horton

D.R. Horton, Inc. operates as a homebuilding company in East, North, Southeast, South Central, Southwest, and Northwest regions in the United States. It engages in the acquisition and development of land; and construction and sale of residential homes in 118 markets across 33 states under the names of D.R. Horton, America’s Builder, Express Homes, Emerald Homes, and Freedom Homes. The company constructs and sells single-family detached homes; and attached homes, such as townhomes, duplexes, and triplexes. It also provides mortgage financing services; and title insurance policies, and examination and closing services, as well as engages in the residential lot development business. In addition, the company develops, constructs, owns, leases, and sells multi-family and single-family rental properties; and owns non-residential real estate, including ranch land and improvements. It primarily serves homebuyers. D.R. Horton, Inc. was founded in 1978 and is headquartered in Arlington, Texas.

About Taylor Wimpey

Taylor Wimpey plc operates as a homebuilder in the United Kingdom and Spain. It builds and delivers various homes and communities. Taylor Wimpey plc was incorporated in 1935 and is based in High Wycombe, the United Kingdom.