Gafisa (OTCMKTS:GFASY) & PulteGroup (NYSE:PHM) Critical Comparison

PulteGroup (NYSE:PHM) and Gafisa (OTCMKTS:GFASY) are both construction companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, profitability, earnings, analyst recommendations and risk.

Insider & Institutional Ownership

89.9% of PulteGroup shares are owned by institutional investors. 0.8% of PulteGroup shares are owned by insiders. Comparatively, 3.1% of Gafisa shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for PulteGroup and Gafisa, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PulteGroup	0	5	9	1	2.73
Gafisa	0	0	0	0	0.00

PulteGroup presently has a consensus target price of $134.1538, indicating a potential upside of 11.59%. Given PulteGroup’s stronger consensus rating and higher probable upside, analysts plainly believe PulteGroup is more favorable than Gafisa.

Valuation and Earnings

This table compares PulteGroup and Gafisa”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PulteGroup	$17.95 billion	1.32	$3.08 billion	$13.38	8.99
Gafisa	N/A	N/A	N/A	N/A	N/A

PulteGroup has higher revenue and earnings than Gafisa.

Profitability

This table compares PulteGroup and Gafisa’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PulteGroup	15.50%	21.01%	14.73%
Gafisa	N/A	N/A	N/A

Volatility and Risk

PulteGroup has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500. Comparatively, Gafisa has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Summary

PulteGroup beats Gafisa on 10 of the 11 factors compared between the two stocks.

About PulteGroup

PulteGroup, Inc., through its subsidiaries, primarily engages in the homebuilding business in the United States. It acquires and develops land primarily for residential purposes; and constructs housing on such land. The company also offers various home designs, including single-family detached, townhomes, condominiums, and duplexes under the Centex, Pulte Homes, Del Webb, DiVosta Homes, John Wieland Homes and Neighborhoods, and American West brand names. In addition, the company arranges financing through the origination of mortgage loans primarily for homebuyers; sells the servicing rights for the originated loans; and provides title insurance policies, and examination and closing services to homebuyers. PulteGroup, Inc. was founded in 1950 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.