Financial Contrast: Beazer Homes USA (NYSE:BZH) and Gafisa (OTCMKTS:GFASY)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Beazer Homes USA	3.91%	7.81%	3.65%
Gafisa	N/A	N/A	N/A

Analyst Ratings

This is a summary of recent recommendations and price targets for Beazer Homes USA and Gafisa, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Beazer Homes USA	1	1	2	0	2.25
Gafisa	0	0	0	0	0.00

Beazer Homes USA presently has a consensus price target of $32.33, suggesting a potential upside of 44.35%. Given Beazer Homes USA’s stronger consensus rating and higher possible upside, research analysts plainly believe Beazer Homes USA is more favorable than Gafisa.

Volatility & Risk

Beazer Homes USA has a beta of 2.1, indicating that its share price is 110% more volatile than the S&P 500. Comparatively, Gafisa has a beta of 0.54, indicating that its share price is 46% less volatile than the S&P 500.

Valuation and Earnings

This table compares Beazer Homes USA and Gafisa”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Beazer Homes USA	$2.33 billion	0.29	$140.18 million	$3.09	7.25
Gafisa	N/A	N/A	N/A	N/A	N/A

Beazer Homes USA has higher revenue and earnings than Gafisa.

Insider & Institutional Ownership

85.7% of Beazer Homes USA shares are held by institutional investors. 6.5% of Beazer Homes USA shares are held by insiders. Comparatively, 3.1% of Gafisa shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Beazer Homes USA beats Gafisa on 10 of the 10 factors compared between the two stocks.

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.

About Gafisa

Gafisa S.A. operates as a development and construction company under the Gafisa brand name in Brazil. The company is involved in residential, commercial, and hotel projects. It also provides technical consultancy services, and real estate management and construction services to third parties. Gafisa S.A. was founded in 1954 and is headquartered in São Paulo, Brazil.