Reviewing Bellway (OTCMKTS:BLWYF) & M.D.C. (NYSE:MDC)

Bellway (OTCMKTS:BLWYF) and M.D.C. (NYSE:MDC) are both consumer cyclical companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, dividends, analyst recommendations, earnings and profitability.

Earnings and Valuation

This table compares Bellway and M.D.C.’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bellway	N/A	N/A	N/A	$1.56	21.75
M.D.C.	$4.64 billion	1.02	$401.01 million	$5.28	11.93

M.D.C. has higher revenue and earnings than Bellway. M.D.C. is trading at a lower price-to-earnings ratio than Bellway, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

49.3% of Bellway shares are owned by institutional investors. Comparatively, 88.1% of M.D.C. shares are owned by institutional investors. 23.3% of M.D.C. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Bellway and M.D.C., as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bellway	0	1	1	0	2.50
M.D.C.	1	4	0	0	1.80

M.D.C. has a consensus price target of $52.13, suggesting a potential downside of 17.24%. Given M.D.C.’s higher possible upside, analysts plainly believe M.D.C. is more favorable than Bellway.

Dividends

Bellway pays an annual dividend of $0.16 per share and has a dividend yield of 0.5%. M.D.C. pays an annual dividend of $2.20 per share and has a dividend yield of 3.5%. Bellway pays out 10.2% of its earnings in the form of a dividend. M.D.C. pays out 41.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. M.D.C. has increased its dividend for 1 consecutive years. M.D.C. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Bellway and M.D.C.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bellway	N/A	N/A	N/A
M.D.C.	8.64%	12.32%	7.34%

Summary

M.D.C. beats Bellway on 10 of the 14 factors compared between the two stocks.

About Bellway

Bellway p.l.c., together with its subsidiaries, engages in the home building business in the United Kingdom. The company builds and sells homes ranging from one-bedroom apartments to six-bedroom family homes, as well as provides homes to housing associations for social housing. It offers homes under Bellway, Ashberry, and Bellway London brands. The company was founded in 1946 and is headquartered in Newcastle upon Tyne, the United Kingdom.

About M.D.C.

M.D.C. Holdings, Inc., through its subsidiaries, engages in the homebuilding and financial service businesses. Its homebuilding operations include purchasing finished lots or developing lots for the construction and sale primarily of single-family detached homes to first-time and first-time move-up homebuyers under the Richmond American Homes name. The company conducts its homebuilding operations in Arizona, California, Nevada, New Mexico, Oregon, Texas, Washington, Colorado, Idaho, Utah, Alabama, Florida, Maryland, Pennsylvania, Tennessee, and Virginia. Its financial services operations comprise originating mortgage loans primarily for homebuyers; providing insurance coverage primarily to its homebuilding subsidiaries and subcontractors for homes sold by its homebuilding subsidiaries, and for work performed in completed subdivisions; acting as a re-insurer on the claims; selling third-party personal property and casualty insurance products to homebuyers; and offering title agency services to homebuilding subsidiaries and customers in Colorado, Florida, Maryland, Nevada, Pennsylvania, and Virginia. The company was founded in 1972 and is headquartered in Denver, Colorado. As of April 19, 2024, M.D.C. Holdings, Inc. operates as a subsidiary of SH Residential Holdings, LLC.