Contrasting Taylor Wimpey (OTCMKTS:TWODF) and M.D.C. (NYSE:MDC)

Posted by Defense World Staff on May 10th, 2024

M.D.C. (NYSE:MDC – Get Free Report) and Taylor Wimpey (OTCMKTS:TWODF – Get Free Report) are both consumer cyclical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, valuation, institutional ownership, risk, profitability, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent recommendations for M.D.C. and Taylor Wimpey, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
M.D.C.	1	4	0	0	1.80
Taylor Wimpey	0	3	0	0	2.00

M.D.C. currently has a consensus target price of $52.13, indicating a potential downside of 17.24%. Given M.D.C.’s higher possible upside, equities research analysts plainly believe M.D.C. is more favorable than Taylor Wimpey.

Dividends

M.D.C. pays an annual dividend of $2.20 per share and has a dividend yield of 3.5%. Taylor Wimpey pays an annual dividend of $0.01 per share and has a dividend yield of 0.4%. M.D.C. pays out 41.7% of its earnings in the form of a dividend. Taylor Wimpey pays out 7.9% 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.

Insider and Institutional Ownership

88.1% of M.D.C. shares are held by institutional investors. Comparatively, 39.9% of Taylor Wimpey shares are held by institutional investors. 23.3% of M.D.C. shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation and Earnings

This table compares M.D.C. and Taylor Wimpey’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
M.D.C.	$4.64 billion	1.02	$401.01 million	$5.28	11.93
Taylor Wimpey	N/A	N/A	N/A	$0.09	20.57

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

Profitability

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

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

Summary

M.D.C. beats Taylor Wimpey on 10 of the 13 factors compared between the two stocks.

About M.D.C.

(Get Free Report)

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.

About Taylor Wimpey