Critical Contrast: Beazer Homes USA (NYSE:BZH) vs. Smith Douglas Homes (NYSE:SDHC)

Smith Douglas Homes (NYSE:SDHC) and Beazer Homes USA (NYSE:BZH) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares Smith Douglas Homes and Beazer Homes USA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Smith Douglas Homes	N/A	N/A	N/A
Beazer Homes USA	7.48%	13.97%	6.43%

Earnings & Valuation

This table compares Smith Douglas Homes and Beazer Homes USA’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Smith Douglas Homes	$764.63 million	0.35	$123.18 million	N/A	N/A
Beazer Homes USA	$2.21 billion	0.40	$158.61 million	$5.18	5.35

Beazer Homes USA has higher revenue and earnings than Smith Douglas Homes.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Smith Douglas Homes and Beazer Homes USA, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Smith Douglas Homes	0	5	1	0	2.17
Beazer Homes USA	0	1	2	0	2.67

Smith Douglas Homes currently has a consensus price target of $27.70, suggesting a potential downside of 8.31%. Beazer Homes USA has a consensus price target of $35.67, suggesting a potential upside of 28.76%. Given Beazer Homes USA’s stronger consensus rating and higher probable upside, analysts plainly believe Beazer Homes USA is more favorable than Smith Douglas Homes.

Institutional & Insider Ownership

85.7% of Beazer Homes USA shares are held by institutional investors. 7.0% of Beazer Homes USA shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Beazer Homes USA beats Smith Douglas Homes on 11 of the 11 factors compared between the two stocks.

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.

About Beazer Homes USA

Beazer Homes USA, Inc. operates as a homebuilder in the United States. It designs, constructs, and sells single-family and multi-family homes under the Beazer Homes, Gatherings, and Choice Plans names. The company also sells its homes through commissioned new home sales counselors and independent brokers in Arizona, California, Nevada, Texas, Indiana, Delaware, Maryland, Tennessee, Virginia, Florida, Georgia, North Carolina, and South Carolina. Beazer Homes USA, Inc. was founded in 1985 and is headquartered in Atlanta, Georgia.