Meritage Homes (NYSE:MTH – Get Free Report) and Universal Electronics (NASDAQ:UEIC – Get Free Report) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.
Profitability
This table compares Meritage Homes and Universal Electronics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Meritage Homes | 6.11% | 7.13% | 4.83% |
| Universal Electronics | -4.57% | 2.70% | 1.44% |
Earnings and Valuation
This table compares Meritage Homes and Universal Electronics”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Meritage Homes | $5.86 billion | 0.73 | $453.01 million | $4.78 | 13.72 |
| Universal Electronics | $330.57 million | 0.20 | -$18.60 million | ($1.16) | -4.46 |
Meritage Homes has higher revenue and earnings than Universal Electronics. Universal Electronics is trading at a lower price-to-earnings ratio than Meritage Homes, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Meritage Homes has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500. Comparatively, Universal Electronics has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500.
Institutional & Insider Ownership
98.4% of Meritage Homes shares are owned by institutional investors. Comparatively, 79.3% of Universal Electronics shares are owned by institutional investors. 2.5% of Meritage Homes shares are owned by company insiders. Comparatively, 17.1% of Universal Electronics shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Analyst Recommendations
This is a summary of current ratings and target prices for Meritage Homes and Universal Electronics, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Meritage Homes | 0 | 7 | 5 | 0 | 2.42 |
| Universal Electronics | 1 | 2 | 0 | 0 | 1.67 |
Meritage Homes currently has a consensus target price of $79.25, suggesting a potential upside of 20.84%. Universal Electronics has a consensus target price of $4.25, suggesting a potential downside of 17.87%. Given Meritage Homes’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Meritage Homes is more favorable than Universal Electronics.
Summary
Meritage Homes beats Universal Electronics on 13 of the 14 factors compared between the two stocks.
About Meritage Homes
Meritage Homes Corporation, together with its subsidiaries, designs and builds single-family attached and detached homes in the United States. The company operates through two segments, Homebuilding and Financial Services. It acquires and develops land; and constructs, markets, and sells homes for entry-level and first move-up buyers in Arizona, California, Colorado, Utah, Texas, Florida, Georgia, North Carolina, South Carolina, and Tennessee. The company also offers title and escrow, mortgage, insurance, and closing/settlement services to its homebuyers. Meritage Homes Corporation was founded in 1985 and is based in Scottsdale, Arizona.
About Universal Electronics
Universal Electronics Inc. designs, develops, manufactures, ships, and supports control and sensor technology solutions in the United States, the People’s Republic of China, rest of Asia, Europe, Latin America, and internationally. The company offers voice-enabled automatically-programmed universal two-way radio frequency, as well as infrared remote controls to video service providers, original equipment manufacturers (OEMs), retailers, and private label customers; wall-mount and handheld thermostat controllers and connected accessories for smart energy management systems to OEM customers, hotels, hospitality, and system integrators; proprietary and standards-based RF sensors for residential security, safety, and home automation applications; and integrated circuits on which its software and universal device control database is embedded to OEMs, video service providers, and private label customers. It also provides software, firmware and technology solutions that can enable devices such as Smart TVs, hybrid set-top boxes, audio systems, smart speakers, game consoles, and other consumer electronic and smart home devices to wirelessly connect and interoperate within home networks; cloud-services that support its embedded software and hardware solutions; intellectual property that the company licenses to OEMs and video service providers; embedded and cloud-enabled software for firmware update provisioning and digital rights management validation services to consumer electronics brands; and AV accessories, including universal remote controls, television wall mounts and stands, and digital television antennas. In addition, the company QuickSet, a software application that can be embedded in entertainment or smart home platform or can be delivered as a cloud-based service, through QuickSet Cloud, to enable universal device setup, interoperability, and control. Universal Electronics Inc. was incorporated in 1986 and is based in Scottsdale, Arizona.
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