KB Home (NYSE:KBH) and Taylor Wimpey (OTCMKTS:TWODY) Financial Analysis

KB Home (NYSE:KBH) and Taylor Wimpey (OTCMKTS:TWODY) are both mid-cap construction companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Institutional & Insider Ownership

96.1% of KB Home shares are held by institutional investors. 3.9% of KB Home shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares KB Home and Taylor Wimpey”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KB Home	$6.67 billion	0.59	$655.02 million	$7.55	7.71
Taylor Wimpey	$4.37 billion	1.10	$433.99 million	N/A	N/A

KB Home has higher revenue and earnings than Taylor Wimpey.

Profitability

This table compares KB Home and Taylor Wimpey’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KB Home	8.47%	14.02%	8.14%
Taylor Wimpey	N/A	N/A	N/A

Volatility & Risk

KB Home has a beta of 1.34, indicating that its stock price is 34% more volatile than the S&P 500. Comparatively, Taylor Wimpey has a beta of 1.61, indicating that its stock price is 61% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for KB Home and Taylor Wimpey, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KB Home	1	7	3	1	2.33
Taylor Wimpey	0	2	0	1	2.67

KB Home currently has a consensus price target of $66.1364, indicating a potential upside of 13.66%. Given KB Home’s higher possible upside, equities research analysts clearly believe KB Home is more favorable than Taylor Wimpey.

Dividends

KB Home pays an annual dividend of $1.00 per share and has a dividend yield of 1.7%. Taylor Wimpey pays an annual dividend of $1.10 per share and has a dividend yield of 8.1%. KB Home pays out 13.2% of its earnings in the form of a dividend. KB Home has raised its dividend for 2 consecutive years.

Summary

KB Home beats Taylor Wimpey on 10 of the 15 factors compared between the two stocks.

About KB Home

KB Home operates as a homebuilding company in the United States. It operates through four segments: West Coast, Southwest, Central, and Southeast. It builds and sells various homes, including attached and detached single-family residential homes, townhomes, and condominiums primarily for first-time, first move-up, second move-up, and active adult homebuyers. The company also provides financial services, such as insurance products and title services, as well as mortgage banking services, including residential consumer mortgage loans to homebuyers. It has operations in Arizona, California, Colorado, Florida, Idaho, Nevada, North Carolina, Texas, and Washington. The company was formerly known as Kaufman and Broad Home Corporation and changed its name to KB Home in January 2001. KB Home was founded in 1957 and is based in Los Angeles, California.

About Taylor Wimpey

Taylor Wimpey plc operates as a homebuilder in the United Kingdom and Spain. It builds and delivers various homes and communities. Taylor Wimpey plc was incorporated in 1935 and is based in High Wycombe, the United Kingdom.